May 122021
 


Francesco Hayez The Death of the Doge Marin Faliero 1867

 

Flaw In Many Models Used For COVID-19 Lockdown Policies (ET)
French Parliament Wakes Up And Says No To The Health Pass (FS)
NHS App Ready To Become Vaccine Passport Next Week (BBC)
World’s Most Vaccinated Nation Sees Active COVID Cases Double In A Week (ZH)
mRNA Covid-19 Vaccine Safety in Pregnant Persons (NEJM)
Sinovac Shot Causes ‘Drastic Drop’ In Deaths, Infections (SCMP)
Rand Paul Clashes With Fauci Over Coronavirus Origins (Hill)
The Raptures of Hyper-Complexity (Kunstler)
Stop The Crap On Colonial (Denninger)
US States Declare Emergency Over Gas Shortage Fears (DW)
If Everyone Sees It, Is It Still A Bubble? (RIA)
Whistleblower Craig Murray Sentenced To 8 Months In Prison (Elmaazi)

 

 

 

 

We’re ruled by fear. There’s simply painfully little common sense left. But here’s some…

“..lockdown measures have caused 282 times more harm than benefit to Canadian society over the long term ..”

Flaw In Many Models Used For COVID-19 Lockdown Policies (ET)

Economics professor Doug Allen wanted to know why so many early models used to create COVID-19 lockdown policies turned out to be highly incorrect. What he found was that a great majority were based on false assumptions and “tended to over-estimate the benefits and under-estimate the costs.” He found it troubling that policies such as total lockdowns were based on those models. “They were built on a set of assumptions. Those assumptions turned out to be really important, and the models are very sensitive to them, and they turn out to be false,” said Allen, the Burnaby Mountain Professor of Economics at Simon Fraser University, in an interview.

Allen says most of the early cost-benefit studies that he reviewed didn’t try to distinguish between mandated and voluntary changes in people’s behaviour in the face of a pandemic. Rather, they just assumed an exponential growth of cases of infection day after day until herd immunity is reached. In a paper he published in April, in which he compiled his findings based on a review of over 80 papers on the effects of lockdowns around the world, Allen concluded that lockdowns may be one of “the greatest peacetime policy failures in Canada’s history.” He says many of the studies early in the pandemic assumed that human behaviour changes only as a result of state-mandated intervention, such as the closing of schools and non-essential businesses, mask and social distancing orders, and restrictions on private social gatherings.

However, they didn’t take into consideration people’s voluntary behavioural changes in response to the virus threat, which have a major impact on evaluating the merits of a lockdown policy. “Human beings make choices, and we respond to the environment that we’re in, [but] these early models did not take this into account,” Allen said. “If there’s a virus around, I don’t go to stores often. If I go to a store, I go to a store that doesn’t have me meeting so many people. If I do meet people, I tend to still stand my distance from them. You don’t need lockdowns to induce people to behave that way.”

Allen’s own cost-benefit analysis is based on the calculation of “life-years saved,” which determines “how many years of lost life will have been caused by the various harms of lockdowns versus how many years of lost life were saved by lockdowns.” Based on his lost-life calculation, lockdown measures have caused 282 times more harm than benefit to Canadian society over the long term, or 282 times more life years lost than saved.

Read more …

More common sense. Google translate from France Soir.

French Parliament Wakes Up And Says No To The Health Pass (FS)

Article 1 of the bill proposed by the government on the issue of ending the health crisis was rejected by the National Assembly. It was the one that specified the operating methods of the health pass. On April 28, the government proposed its bill relating to the management of the exit from the health crisis. Article 1 of this project made the famous “sanitary pass” appear in black and white, which was to be implemented little by little over the summer, in particular for events welcoming more than 1,000 people. First, this bill went through the committee, then was admitted at first reading in the National Assembly yesterday, Monday, May 10, with 234 amendments to be studied. During more than six hours of debate, these amendments were swept away one by one, whether they were a deletion of an article, a rewrite or even a simple clarification.

As a result, this Tuesday morning, the newspapers overwhelmingly headlined that the “green light for the health pass” had been given by the National Assembly. That was indeed how things were shaping up. Roland Lescure, LREM deputy, to describe these measures as “a condition of regained freedoms”. Only, as Philippe Gosselin, LR deputy rightly and ardently pointed out, the opposition and the majority converged yesterday, in places, to say that the project had errors and inconsistencies. Martine Wonner, MP for Freedom and Territories, asked the question even more clearly: “In peacetime, the Republic has never known such restriction of freedoms. So who is the government at war with?”

Yesterday evening, the deputies were only 143 to be present in the hemicycle. Today, there were 213. Finally, at the end of the study of the amendments to article 1, the vote proved the opposition right! As a result, article 1, on which the majority of the bill is based, is not adopted: 211 voters: 103 FOR / 108 AGAINST For good reason, while it has been four years since it happened, the MoDem has dissociated itself from the majority. They who quoted Victor Hugo yesterday: “in the storm and the noise, clarity reappears, increased”. Philippe Latombe thus underlined the will of the people, namely to have a “coherent and clear political voice”. In fact, the MoDem deputies were demanding regarding the adoption of this bill and the characteristics of the health pass. While for 14 months the power of Parliament had at least been reduced, the deputies were able to be heard this evening.

Read more …

The opposite of common sense.

NHS App Ready To Become Vaccine Passport Next Week (BBC)

England’s NHS app will be available to use as a vaccine passport from Monday, the government has said – but only for those who have had both doses of the jab. A paper version will also be available – by calling 119 but not through a GP. Both will be available from Monday, 17 May, when the ban on foreign travel is eased. The NHS app is separate to the NHS Covid-19 app, which is used for contact tracing. People can already use the NHS app to: • request repeat prescriptions • arrange appointments to see their doctor • view medical records • It can also show vaccine statuses, including for coronavirus, but currently this feature must be enabled by a GP before it appears on the app.

The new update will contain a separate feature to display coronavirus vaccine records, so the government said there should be no need to contact GPs. The app will not show coronavirus test results, but the NHS plans to incorporate this in the future, the government website said. It advised people to register to use the app at least two weeks before travelling. A paper letter can be requested only at least five days after a second vaccine dose and can take five days to arrive. “There are not many countries that currently accept proof of vaccination,” the government advice warns. “So for the time being, most people will still need to follow other rules when travelling abroad – like getting a negative pre-departure test.”

The government has announced 12 countries people in England can travel to, without having to quarantine when they return. But not all of these destinations allow UK tourists. For example, travel to mainland Portugal and the Azores is currently for essential purposes only. The list will be reviewed every three weeks. Countries can be added or removed at short notice.

Read more …

Will we see this in more places?

World’s Most Vaccinated Nation Sees Active COVID Cases Double In A Week (ZH)

The situation in the Seychelles, an island nation that has suffered from a recent surge in COVID-19 cases despite boasting the world’s highest vaccination rate, is going from bad to worse. Since we last reported on the Seychelles one week ago, the island nation has faced a fresh surge in COVID cases. The vaccine failure cannot be determined without a detailed assessment, said the WHO. The hike in coronavirus cases has stoked concerns that the jabs might not be helping to suppress the island nation’s COVID-19 outbreak. A vaccine failure can’t be determined without a detailed study by the WHO, however. Presently, the health body is in direct communication with Seychelles and working on evaluating the situation, said Kate O’Brien, director of the WHO’s department of immunization, vaccines and biologicals at a briefing on May 10.


The Indian Ocean archipelago nation started vaccinations in January when it introduced the Chinese-developed Sinopharm vaccine. It administered Chinese vaccine shots to 57% of those who were fully inoculated and the rest received vaccines that were made in India. Since last week, the number of active coronavirus cases has more than doubled to 2,486 people. Of these, 37 percent of the population have received both the vaccine doses, as per the report. Due to the surge in COVID-19 cases, Seychelles re-imposed curbs last week, including closing schools, canceling sports events and banning mingling of households.

Read more …

Imagine taking an mRNA injection when you’re pregnant. “Pregnant Persons” sounds like a sign of our times. I will not get used to it.

mRNA Covid-19 Vaccine Safety in Pregnant Persons (NEJM)

BACKGROUND Many pregnant persons in the United States are receiving messenger RNA (mRNA) coronavirus disease 2019 (Covid-19) vaccines, but data are limited on their safety in pregnancy.

METHODS From December 14, 2020, to February 28, 2021, we used data from the “v-safe after vaccination health checker” surveillance system, the v-safe pregnancy registry, and the Vaccine Adverse Event Reporting System (VAERS) to characterize the initial safety of mRNA Covid-19 vaccines in pregnant persons.

RESULTS A total of 35,691 v-safe participants 16 to 54 years of age identified as pregnant. Injection-site pain was reported more frequently among pregnant persons than among nonpregnant women, whereas headache, myalgia, chills, and fever were reported less frequently. Among 3958 participants enrolled in the v-safe pregnancy registry, 827 had a completed pregnancy, of which 115 (13.9%) resulted in a pregnancy loss and 712 (86.1%) resulted in a live birth (mostly among participants with vaccination in the third trimester). Adverse neonatal outcomes included preterm birth (in 9.4%) and small size for gestational age (in 3.2%); no neonatal deaths were reported. Although not directly comparable, calculated proportions of adverse pregnancy and neonatal outcomes in persons vaccinated against Covid-19 who had a completed pregnancy were similar to incidences reported in studies involving pregnant women that were conducted before the Covid-19 pandemic. Among 221 pregnancy-related adverse events reported to the VAERS, the most frequently reported event was spontaneous abortion (46 cases).

CONCLUSIONS Preliminary findings did not show obvious safety signals among pregnant persons who received mRNA Covid-19 vaccines. However, more longitudinal follow-up, including follow-up of large numbers of women vaccinated earlier in pregnancy, is necessary to inform maternal, pregnancy, and infant outcomes.

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Bit of PR from SCMP. What it depicts mostly is the difficulty in having the “poor” vacccinated.

Sinovac Shot Causes ‘Drastic Drop’ In Deaths, Infections (SCMP)

Sinovac Biotech Ltd’s vaccine is wiping out Covid-19 among health workers in Indonesia, an encouraging sign for the dozens of developing countries reliant on the controversial Chinese shot, which performed far worse than Western vaccines in clinical trials. Indonesia tracked 25,374 health workers in capital city Jakarta for 28 days after they received their second dose and found that the vaccine protected 100 per cent of them from death and 96 per cent from hospitalisation as soon as seven days after, said Health Minister Budi Gunadi Sadikin in an interview on Tuesday. The workers were tracked until late February.

Sadikin also said that 94 per cent of the workers had been protected against infection – an extraordinary result that goes beyond what was measured in the shot’s numerous clinical trials – though it is unclear if the workers were uniformly screened to detect asymptomatic carriers. “We see a very, very drastic drop,” in hospitalisation and deaths among medical workers, Sadikin said. It is not known what strain of the coronavirus Sinovac’s shot worked against in Indonesia, but the country has not flagged any major outbreaks driven by variants of concern. The data adds to signs out of Brazil that the Sinovac shot is more effective than it proved in the testing phase, which was beset by divergent efficacy rates and questions over data transparency. Results from its biggest Phase III trial in Brazil put the shot known as CoronaVac’s efficacy at just above 50 per cent, the lowest among all first-generation Covid-19 vaccines.

In a separate interview with Bloomberg on Tuesday, Sinovac’s CEO Yin Weidong defended the disparity in clinical data around the shot, and said there was growing evidence CoronaVac is performing better when applied in the real world. But the real-world examples also show that the Sinovac shot’s ability to quell outbreaks requires the vast majority of people to be vaccinated, a scenario that developing countries with poor health infrastructure and limited access to shots cannot reach quickly. In the Indonesian health worker study, and another in a Brazilian town of 45,000 people called Serrana, nearly 100 per cent of people studied were fully vaccinated, with serious illness and deaths dropping after they were inoculated.

Read more …

Time for the NIH to come clean.

Rand Paul Clashes With Fauci Over Coronavirus Origins (Hill)

Anthony Fauci on Tuesday clashed with Sen. Rand Paul (R-Ky.) over the role of the Wuhan, China, virology lab in the origins of COVID-19. During a Senate hearing on the pandemic response, Paul alleged that the National Institutes of Health (NIH) had been sending funding to the Wuhan lab, which then “juiced up” a virus that was originally found in bats to create a supervirus that can infect human cells. Paul pressed Fauci on the theory that the novel coronavirus was created in the Wuhan lab, and then somehow escaped, either because of an accident or because it was deliberately released. “Sen. Paul, with all due respect, you are entirely, entirely and completely incorrect,” Fauci said. “The NIH has not ever, and does not now, fund ‘gain of function research’ in the Wuhan Institute.”

Paul continued to argue with Fauci, who is the director of the NIH’s National Institute of Allergy and Infectious Diseases (NIAID), accusing him of cooperating with the Chinese government, and supporting the laboratory that bioengineered a deadly virus. Fauci noted that although the NIH did fund a project at the Wuhan lab, it was not meant for “gain of function” research into human-made superviruses. The NIH gave a grant to a group called EcoHealth Alliance, which hired the virology lab in Wuhan to conduct genetic analyses of bat coronaviruses and examine how they spread to humans. The Trump administration last year forced the NIH to terminate the grant. The false link between Fauci, the NIH and the Wuhan lab has been circulating among right-wing media and politicians like Paul and Sen. Ron Johnson (R-Wis.) for months.

“Let me explain to you why that was done, the SARS COV-1 originated in bats in China. It would have been irresponsible of us if we did not investigate the bat viruses and the serology to see who might have been infected,” Fauci said. Gain of function research is a controversial form of study that involves boosting the infectivity and lethality of a pathogen. Fauci has advocated for the research in the past, but he denied that the NIH was funding it in China. But Paul interrupted him, and hinted that not only was the virus introduced to the world because of a lab accident, it was also biologically engineered. “Government scientists like yourself who favor gain function … ” Paul said. “I don’t favor gain of function research in China and you are saying things that are not correct,” Fauci interrupted.

Fauci Rand Paul
https://twitter.com/i/status/1392137203925622790

Read more …

“Taking down the grid would be, effectively, the end of civilization, at least for a while, maybe a long while, maybe for good.”

The Raptures of Hyper-Complexity (Kunstler)

I think you get the picture. That whole kit of industrial production is long gone, and we’re left in an economic slum of Chinese product “welfare” (stuff for treasury bonds) juiced on computer-driven hyper-complexity, decorated with junk enterprise like social media, streaming pornography, crypto-currency mining, and chicken nuggets — with a lot of deceptive and useless motion in the form of mass motoring to provide the illusion that this country is actually going somewhere… all with a poison Chinese Covid-19 cherry-on-top. This is the outfit that Joe Biden is ostensibly the president of. Now along comes the curious case of the Colonial Pipeline shutdown. It’s especially interesting because the pipeline itself, while big (5,500 miles long, from refineries in Texas clear up to gas stations in New York), is itself not that complicated.

It’s a tube that a few volatile liquids move through: gasoline, aviation fuel, diesel oil. It has a bunch of valves to regulate the flows of these liquids. Plus, some storage tank-farms. The valves are computerized. That seems to be the problem. There was no physical damage to the pipeline and its components. The software that runs it got hacked, reportedly a “ransom-ware” sting, where unknown actors get control of the software and won’t relinquish it unless a whole lot of cash gets forked over by some non-traceable electronic means of transfer. I imagine it’s this last point that Colonial and its hackers are haggling over now, which explains the failure to restart the otherwise undamaged pipeline. I also imagine, meanwhile, all kinds of private and government computer savants are trying like hell to hack the hack behind the scenes.

The Colonial Pipeline is easy-peasy compared to the financial system and the electric grid. If the first one gets hacked, the nation’s nominal wealth might disappear (yours included), and, anyway, the financial system itself is not just enormous and hyper-complex, but much of its complexity conceals the massive misrepresentation of vaporous entities for “money” and any stoppage of the flows of that “money,” and things purporting to derive from it, will reveal the black hole at the center of all that activity. Hear that giant sucking sound? That was your livelihood, your pension, and your legacy rushing by en route to zero.

The electric grid is sometimes referred to as “the biggest machine in the world.” Unlike the financial system, it’s not largely stoked on hyper-complex dishonesty, it’s just really old, and jerry-rigged, and held together with duct-tape and baling wire. Probably a few kids in a basement somewhere — not even enemies of the republic, necessarily — could initiate a software attack that causes a whole lot of damage to transformers and other vital components and starts a process that wrecks the whole darn thing. Taking down the grid would be, effectively, the end of civilization, at least for a while, maybe a long while, maybe for good.

Read more …

The mega Colonial spill last year would seem to be connected to this.

Stop The Crap On Colonial (Denninger)

Let’s start with the stupid: Yes, what they did, assuming the reports are accurate, was stupid. You do not connect anything that has access to SCADA, that is, control systems, to the Internet. Period. I don’t care how. I don’t why. I don’t care what. You don’t do it. End of discussion. Oh, but that means the employees can’t work from home! Correct. Sit in office, work on machine, machine has zero external connectivity, no USB ports or instantly alarms if you plug something into one, etc. Connections between facilities are encrypted over centrally-controlled infrastructure with regular audits. Nothing beyond the orbit of those devices connects to the sane and sanitary systems. Period, end of discussion, no exceptions. Next, there are rumors that Colonial had a leak in their line and it was spewing fuel into the environment.

It was allegedly supposed to be fixed by a given date. More than one million gallons of gas spewed out of it. Eight months later it was still not corrected. That was on April 19th of this year. So what’s going on here? I get it. Things break. We rely on “things” for our daily lives. A certain amount of human error and trouble is expected. I’m ok with this; many are not, but I am because I like to have fuel in my car and groceries on the shelves, and without said technology, which comes with risk, we won’t have those things. There are people who think we can avoid all that. They’re wrong.

But how many articles have I written over the last 13 years talking about cybersecurity and proper control over one’s infrastructure when it comes to critical items. You know, like pipeline pressures, delivery quantities, etc? How is it that this sort of volume of gasoline managed to get out? Is there not a set of flow meters on the inlet and outlet, and do they not match? Are there not pressure transducers that detect a violation of the pipe’s integrity? Is not the characterization of the flow known; the pipe is “X” length, the pressure is “Y”, the flow is “Z” and we know what it’s made of so we should be able to reasonably compute what the frictional loss is over a given distance. Further, as should be obvious, if 1,000 gallons go in one end then exactly 1,000 gallons have to come out the other end, right? This isn’t a damned garden spray-nozzle!

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“Granholm said that there was not a supply shortage, but rather a “crunch”..”

US States Declare Emergency Over Gas Shortage Fears (DW)

Several east coast US states declared a state of emergency on Tuesday as gas stations began to run out of gasoline, five days after a cyberattack brought down the key Colonial pipeline. Despite assurances from President Joe Biden’s administration that the pipeline, which provides almost half the gas to the eastern seaboard, would be up and running within days, panicked drivers continued to top up their tanks. “We are asking people not to hoard,” US Energy Secretary Jennifer Granholm told reporters at the White House. “Things will be back to normal soon.” State governors in Florida, Georgia, North Carolina and Virginia implemented states of emergency to deal with the growing number of gas stations that were running out of fuel.


Declaring a state of emergency allows state governments to activate the National Guard as needed, and helps streamline cooperation between state and local officials. In the Georgia metropolis of Atlanta, some 30% of gas stations had run dry, with a similar number in Raleigh, North Carolina, according to the tracking firm GasBuddy. By 4 p.m. EST (20:00 UTC) almost 8% of gas stations throughout the state of Virginia had run out of gas, while in Florida close to 3% were empty, CNN reported. Granholm said that there was not a supply shortage, but rather a “crunch” in some states that are particularly reliant on the Colonial pipeline. Georgia lifted sales tax on gas until Saturday to help consumers while the federal government temporarily loosened certain environmental and working hours regulations to smooth out the problems.

Read more …

End the Fed.

If Everyone Sees It, Is It Still A Bubble? (RIA)

“If everyone sees it, is it still a bubble?” That was a great question I got over the weekend. As a “contrarian” investor, it is usually when “everyone” is talking about an event; it doesn’t happen. As Mark Hulbert noted recently, “everyone” is worrying about a “bubble” in the stock market. To wit: “To appreciate how widespread current concern about a bubble is, consider the accompanying chart of data from Google Trends. It plots the relative frequency of Google searches based on the term ‘stock market bubble.’ Notice that this frequency has recently jumped to a far-higher level than at any other point over the last five years.”

What Is A Bubble? “My confidence is rising quite rapidly that this is, in fact, becoming the fourth ‘real McCoy’ bubble of my investment career. The great bubbles can go on a long time and inflict a lot of pain, but at least I think we know now that we’re in one.” – Jeremy Grantham What is the definition of a bubble? According to Investopedia: “A bubble is a market cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. Typically, what creates a bubble is a surge in asset prices driven by exuberant market behavior. During a bubble, assets typically trade at a price that greatly exceeds the asset’s intrinsic value. Rather, the price does not align with the fundamentals of the asset.“


This definition is suitable for our discussion; there are three components of a “bubble.” The first two, price and valuation, are readily dismissed during the inflation phase. Jeremy Grantham once produced the following chart of 40-years of price bubbles in the markets. During the inflation phase, each was readily dismissed under the guise “this time is different.” As Howard Marks previously noted: “It’s the swings of psychology that get people into the biggest trouble. Especially since investors’ emotions invariably swing in the wrong direction at the wrong time. When things are going well people become greedy and enthusiastic. When times are troubled, people become fearful and reticent. That’s just the wrong thing to do. It’s important to control fear and greed.”

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He was sentenced because of “jigsaw identification”, but no-one was identified.

“..the women who are meant to be threatened with jigsaw ID all remained anonymous, Alex Salmond’s life was destroyed, and Craig Murray’s life is about to be destroyed too.”

Whistleblower Craig Murray Sentenced To 8 Months In Prison (Elmaazi)

Former UK diplomat-turned whistleblower Craig Murray was sentenced to eight months in prison at the High Court in Edinburgh for contempt of court resulting from his coverage of the trial of former Scottish First Minister Alex Salmond. A three-judge panel determined on March 25, 2021—following a two-hour trial in January—that information published by Murray in a number of his blog posts was likely to lead indirectly to people being able to identify witnesses in Salmond’s sexual assault trial. This process, known as “jigsaw identification,” refers to the possibility that a person may piece together information from various sources to arrive at the identification of a protected witness.

In doing so, the judge ruled that Murray violated a court order prohibiting the publication of information that could likely lead to the identification of the alleged victims in Salmond’s case. Murray is a broadcaster, human rights advocate and journalist, who has extensively covered the prosecution of WikiLeaks founder Julian Assange and is known to support other whistleblowers. He also strongly supported Salmond and the Scottish campaign for independence. He denied the charges, arguing he went to great pains to cover the prosecution without identifying the witnesses. The trial and eight-month prison sentence was heavily criticized by a number of veteran Scottish journalists and lawyers.

Hugh Kerr, a former vice chair of the National Union of Journalists who was once a Labour Party Member of the European Parliament before he joined the SNP, told The Dissenter that he considered both the verdict and the sentence in Murray’s case to be “disgraceful.” “[This decision represents] a real threat to civil liberties,” Kerr argued. “A key point, of course, the women who are meant to be threatened with jigsaw ID all remained anonymous, Alex Salmond’s life was destroyed, and Craig Murray’s life is about to be destroyed too.” “I know that Craig shall appeal not only to the Supreme Court but also to the European Court of Human Rights. He will do so with the support of many people in Scotland and many people around the world,” Kerr added.

“It is believed to be the first instance in Scottish legal history where ‘jigsaw identification’ has led to an individual being imprisoned,” a statement released on behalf of Murray’s family declared. Award-winning investigative journalist John Pilger said, “In these dark times, Craig Murray’s truth-telling is a beacon. He is owed our debt of gratitude, not the travesty of a prison sentence which, like the prosecution of Julian Assange, is a universal warning.” “Craig Murray has compiled a remarkable record of courage and integrity in exposing crimes of state and working to bring them to an end,” Professor Noam Chomsky stated, contending Murray “fully merits our deep respect and support for his achievements.”

Read more …

 

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On this day in 330, Constantine The Great dedicated the ancient Greek city of Byzantium as the new capital of the Eastern Roman Empire and renamed it Constantinople.

 

 

 

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Jul 272020
 


Opening of Golden Gate Bridge May 27 1937

 

$1,200 Stimulus Check, Eviction Moratorium, and Reduced Unemployment Aid (ZH)
Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush (R.)
Lockdown Has Made The Nation Happier – Study (Ind.)
Vietnam Orders Evacuation Of 80,000 People After Three Test Positive (Ind.)
Spain’s COVID19 Death Toll Could Be 60% Higher Than Reported – El Pais (RT)
The $52 Trillion Bubble That Has “Hijacked China’s Economy”
Britain Unveils Plans To Tackle ‘Obesity Time Bomb’ (R.)
Riots Are Driving Portland’s Small Businesses Under (RT)
Biden Campaign Declines ‘Fox News Sunday’ Interview (Fox)
More Willful Blindness By The Media On Spying By Obama Administration (Turley)

 

 

Don’t know why, is it because it’s Monday, or because I worked hard all weekend, but I had a bit of a hard time finding things today that I found interesting. That was mostly made up for when I saw these headlines in Britain’s Independent newspaper: “Lockdown Has Made The Nation Happier” and “Lockdown Took Away My Freedom But Set Me Free Spiritually”. That is genius. Especially when followed by the news that Vietnam is evacuating 80,000 people from Danang because three were infected. That’s 80,000 people about to be happier.

Plus more news that the dollar is diving. Nor sure against what. I still think it’s gold that is rising, not the other way around. One look at gold vs euro confirms it. But that’s just me. Then again, sure, there’s tons of people betting against the dollar right now. That doesn’t mean it’s smart bet, though.

 

And as I write this, there’s another Assange circus “trial” happening. Intensely sad.

 

 

Substantial declines in new cases for both the world and the US. I just wish I could be a bit happier about them, but it was only a Sunday yesterday.

 

 

 

 

 

 

 

 

 

 

Power, not people. From both sides. Down to the wire it is.

$1,200 Stimulus Check, Eviction Moratorium, and Reduced Unemployment Aid (ZH)

With the Trump Treasury sitting on $1.8 trillion and three months to spend it, the White House and Senate Republicans are set to introduce a $1 trillion spending bill on Monday which would be released in stages – angering Democrats who are pushing for an immediate, $3 trillion shotgun blast of stimulus. Speaking with ABC’s “This Week,” White House Chief of Staff Mark Meadows said “I see us being able to provide unemployment insurance, maybe a retention credit, to keep people from being displaced or brought back into the workplace, helping with our schools,” adding “we can negotiate on the rest of the bill in the weeks to come.” “The Trump administration opposes an extension of a $600-a-week enhanced unemployment payment that expired this month, Mnuchin and Meadows said.

Instead, White House officials favor a plan to reimburse an individual’s lost wages or salary by up to 70%”, said Mnuchin and Meadows.” -Newsday. House Speaker Nancy Pelosi (D-CA) popped a fuse at the GOP proposal, blaming Republicans for waiting too long to negotiate for more relief after House Democrats passed a fifth, $3 trillion relief bill which would have included immediate aid to state and local governments, expanded testing and contact tracing for COVID-19. Appearing on CBS’s “Face the Nation,” Pelosi said that Republicans are “in disarray and that delay is causing suffering for America’s families. So we have been ready for two months and 10 days. I’ve been here all weekend hoping they had something to give us.” Treasury Secretary Steven Mnuchin, meanwhile, says the White House is “prepared to act quickly.” We bet they are.

Mnuchin added that unemployment benefits would be extended, while schools and universities would receive protection against “frivolous” lawsuits – part of overall GOP support for protections that would also include corporations. “Within the trillion-dollar package, there’s certain things that have time frames that are a bigger priority, so we could look at doing an entire deal, we could also look at doing parts,” said Mnuchin, adding that he would push for a “technical fix” to unemployment insurance after many have criticized the $600 weekly benefit as being too high, and a disincentive to searching for a job.

Read more …

Oh wait, I covered this yesterday. This morning, gold rises about as much vs the euro as vs the USD. So what is the dollar “diving” against other than gold and silver?

Gold Soars To All-Time High As Dollar Dive Boosts Safety Rush (R.)

Gold surged to record highs on Monday as an intensifying U.S.-China row and a weaker dollar sent investors scurrying to the safety of bullion to hedge against the risks to a global economy already reeling from the COVID-19 pandemic. Spot gold rose 1.6% to $1,931.50 per ounce by 0627 GMT after hitting a record high of $1,943.93. U.S. gold futures gained 1.6% to $1,927.50. Silver too joined the rally, jumping more than 6% to $24.36, its highest since September 2013. Gold is in “perfect condition to move higher,” said ANZ commodity strategist Soni Kumari, amid the virus crisis and central banks pushing for liquidity.


“Further support is also coming from falling yields, weaker dollar and geopolitical tensions between the U.S. and China. The safe-haven demand (for gold) has been rising while there is none for USD anymore.” The dollar fell to a near two-year low on increased bets the U.S. Federal Reserve could flag another accommodative policy shift when it meets this week, implying lower interest rates for longer. China seized the U.S. consulate in Chengdu, retaliating to the closure of its own consulate in Houston. Meanwhile, COVID-19 cases surged to over 16.13 million globally, driving expectations of more stimulus to stem the economic blow. “As long as the (virus) situation gets worse, the market is discounting more stimulus for a longer period of time and in bigger quantities,” said Edward Meir, analyst at ED&F Man Capital Markets.

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Brilliant. Evokes the image of a guy pointing a gun at your forehead saying: I’m here to make you happy.

The Independent today also runs a story entitled “Lockdown Took Away My Freedom But Set Me Free Spiritually”. Just so you know.

Wonder what this pays.

Lockdown Has Made The Nation Happier – Study (Ind.)

Lockdown helped to restore people’s happiness after national levels fell when the pandemic began, new research suggests. According to a study by Cambridge University’s Bennett Institute for Public Policy, the number of Britons self-reporting as “happy” halved in just three weeks at the start of lockdown. Using data taken from YouGov Weekly Mood Tracker surveys and Google searches, the researchers found that the number of people declaring themselves as “happy” went from 51 per cent just before the UK’s first Covid-19 fatality to 25 per cent by the time lockdown began on 23 March. However, once lockdown restrictions started to be lifted, these figures reversed, with happiness levels increasing back to close to what they were pre-pandemic, reaching 47 per cent by the end of May.


The study also identified a distinction between life satisfaction among social groups, with those in wealthy categories experiencing a decline while the most deprived groups reported a relative rise in life satisfaction. Dr Roberto Foa, from Cambridge’s Department of Politics and International Studies and director of the YouGov-Cambridge Centre for Public Opinion Research, commented: “It was the pandemic, not the lockdown, that depressed people’s wellbeing. “Mental health concerns are often cited as a reason to avoid lockdown. “In fact, when combined with employment and income support, lockdown may be the single most effective action a government can take during a pandemic to maintain psychological welfare.”

Read more …

And here’s 80,000 more and happier Vietnamese.

Vietnam Orders Evacuation Of 80,000 People After Three Test Positive (Ind.)

Vietnam has ordered the evacuation of 80,000 people from the coastal city of Danang after three residents there tested positive for coronavirus. The government said the evacuation would take four days and involve flights chartered to 11 different Vietnamese cities. Vietnam, which has been praised for its pandemic response after reporting just 400 cases and no deaths, went back on high alert at the weekend as it confirmed its first local infections since April, all in the popular tourism destination of Danang. An aggressive and widespread testing regime plus a strict quarantine had helped the South-East Asian nation almost eradicate Covid-19 within its borders, but the authorities are now grappling with its first internal infections for months. Although foreign tourists are still barred from entering the country, there has been a surge of domestic travel as the Vietnamese take advantage of discounted flights and hotel deals.


Anyone who had recently returned home from a break in Danang would be required to quarantine at home for 14 days, the health ministry has said. In addition, the prime minister Nguyen Xuan Phuc has also ordered police to step up a crackdown on illegal immigration. It is not clear if the new Danang cases are connected to people entering Vietnam secretly but Vietnamese state media said on Sunday police had arrested a Chinese man accused of running a gang which smuggled people into the country from China. On Monday, the government announced more than 1,500 people had been caught illegally crossing the border from China into Ha Giang province in Vietnam since May. Most of those caught were Vietnamese citizens and had been sent into quarantine.

Read more …

Probably true in many places.

Spain’s COVID19 Death Toll Could Be 60% Higher Than Reported – El Pais (RT)

Spain’s Covid-19 death toll could be off by 60 percent, according to calculations by the country’s leading newspaper, El Pais, which suggest Spain has the second-highest number of deaths in Europe after the UK. An El Pais investigation published on Sunday found that the official figure of 28,432 deaths is likely far less than the true number of people who have died with the virus. Spain’s official death toll only includes people who had a confirmed Covid-19 diagnosis, and not those who were suspected of having it but were never tested. El Pais looked at regional statistics on all suspected and confirmed deaths from the virus and concluded that 44,868 people died with Covid-19.


This figure is close to the number of excess deaths recorded by the National Epidemiology Centre and National Statistics Centre (INE) in June. It found that there were 43,945 more deaths between January and May 2020 than the previous year. The Spanish Association of Professionals and Funeral Services and the Carlos III Health Institute also calculated similar excess mortality figures during this time. If El Pais’ figures are accurate, it would mean that Spain has seen the second most deadly outbreak in Europe after the UK, which has recorded over 45,000 deaths. There was a lack of widespread testing carried at the beginning of the outbreak, which might explain the discrepancy with the official figures. At the end of May, the country lowered its death toll by 2,000 as a result of duplicate records and some regions reporting suspected cases as confirmed cases.

Read more …

All our money on one horse.

The $52 Trillion Bubble That Has “Hijacked China’s Economy”

More than three years ago, we explained why “the fate of the world economy is in the hands of China’s housing bubble.” As we said at the time, “China has always been a serial bubble inflator courtesy of a closed (capital account) economy, and nearly $30 trillion in bank deposits [$40 trillion as of July 2020] which slosh from one asset class to another, be it the stock market, bitcoin, commodities, farm animals or – most often – housing. ” Why is it so important for China to consistently reflate this bubble? The answer is simple: for China’s middle class there is no more important asset than housing: as Deutsche’s Zhiewi Zhang wrote in 2017 when discussing the macro and market consequences of the Chinese bubble, it is nothing more (or less) than “a massive wealth effect.”


Furthermore, unlike the US, which is hyperfinancialized and the bulk of household net worth is in financial assets (less than 30% is in real estate), in China it is the opposite, and roughly three-quarters of all household worth is in real estate. And since a global healthy economy starts with a growing, stable and inflating Chinese economy, unless China’s housing bubble is growing at a steady, measured pace created a “wealth effect” illusion among several hundred million middle-class Chinese, we concluded three years ago that the global economy is just as reliant on China’s housing market as it is on the global – and certainly US – stock market. Fast forward a little over three years, when China’s housing bubble is bigger than ever, and now the WSJ has picked up on what we said three years ago, namely that China’s epic housing market is perhaps the world’s most defining bubble, and more importantly, not even the covid pandemic did anything to threaten the sanctity of this bubble.

First, some context why China’s housing bubble currently eclipses the one in U.S. housing in the 2000s: “At the peak of the U.S. property boom, about $900 billion a year was being invested in residential real estate. In the 12 months ended in June, about $1.4 trillion was invested in Chinese housing. More was invested last month in Chinese real estate than any other month on record.” Some more statistics: “the total value of Chinese homes and developers’ inventory hit $52 trillion in 2019, according to Goldman Sachs, twice the size of the U.S. residential market and outstripping even the entire U.S. bond market.” China’s housing market is certainly bigger than the US stock market, and at its current growth rate will surpass the total value of all global stocks (which is currently about $85 trillion) in just a few years!

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He’ll be forever known as Fat Boris now.

Britain Unveils Plans To Tackle ‘Obesity Time Bomb’ (R.)

Britain unveiled plans to tackle an “obesity time bomb” on Monday, banning TV and online adverts for junk food before 9.00 p.m., ending “buy one get one free” deals on such foods and putting calories on menus.
Prime Minister Boris Johnson, who has lost weight since he was in intensive care with COVID-19, wants to tackle obesity after research showed those who are obese or overweight are at increased risk of death or severe illness from the coronavirus. Last month, he said Britain was fatter than most European countries apart from Malta and his government described “tackling the obesity time bomb” as a priority.

Ditching his earlier stance as a non-believer of “nannying” politics, his government is announcing a new drive to help people to “take control of their own future by losing weight, getting active and adopting a healthier lifestyle”. Alongside the ban on adverts before 9.00 p.m. (2000 GMT), on food deals and plans for the calorific content of meals to be displayed on menus, the government will also launch a consultation on displaying calories on alcohol. “Losing weight is hard but with some small changes we can all feel fitter and healthier,” Johnson said in a statement. “If we all do our bit, we can reduce our health risks and protect ourselves against coronavirus – as well as taking pressure off the NHS (National Health Service).”

With more than 60% of adults in Britain considered overweight or obese, according to Public Health England, the coronavirus crisis has put the obesity issue at the forefront of the government’s thinking, with a “Better Health” campaign being launched alongside the new measures.

Read more …

Thought experiment: imagine this happening in a French or German city. How do you think their governments would react?

Riots Are Driving Portland’s Small Businesses Under (RT)

After nearly 60 straight nights of violence, business owners in Portland are sick and tired of riots. But as their stores go under, the coastal media treats the rioters to glowing coverage and city authorities do nothing. Portland is a liberal stronghold, and as ‘Black Lives Matter’ protests fizzle out around the country, anger remains at boiling point in the Oregonian city. The protests there have not been all banner-waving and slogan-chanting affairs though. Instead, droves of ‘Antifa’ types have laid siege to the city’s Justice Center for almost two months, tearing down barricades, lobbing fireworks, setting fires and stabbing each other.

Most of those involved in the riots would probably say they’re fighting police brutality or fascism, or something of the sort, but besides those injured in that fight there are other victims of the unrest – local business owners have repeatedly complained about the riots to the local media. In articles published every few days, these store owners, barmen and restaurateurs describe how the riots have driven them to the brink of bankruptcy. One clothing store manager told Oregon Live on Saturday that within days of coronavirus restrictions being lifted, he reopened his family’s store, only to watch rioters trash the premises in late May, days after the killing of George Floyd kicked off the season of unrest.

[..] While local news tells tales of shuttered stores and bankrupt businesses, national media outlets describe the violence in Portland as a good v evil showdown between protesters and federal “stormtroopers.” As store owners told their stories to local media, the New York Times ran an article last week celebrating the “diverse elements” taking part in the protests. The “mothers in helmets,” and “anti-fascist activists” are “largely peaceful,” the paper wrote, describing how they have been “galvanized” by the “militarized” feds on the streets. The Washington Post was even more effusive in its praise, describing the feds’ use of tear gas as a “chemical weapon,” and honoring the moms, dads, teachers and healthcare workers who refuse to disperse and willingly stride into the choking fumes. The motives of the protesters – beyond vague demands for “racial justice” – are never explained, but the Post painted a truly heroic image of one man using a leaf blower to fire gas back at the agents.

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For now, the basement is winning. So why change?

Biden Campaign Declines ‘Fox News Sunday’ Interview (Fox)

During his interview with Chris Wallace last week, President Trump questioned whether the Democrats’ presumptive presidential nominee, Joe Biden, could handle the barrage of questioning that Wallace posed to Trump. The answer to that question – at least for now – we may never know. Wallace on Sunday informed viewers that the Biden campaign told Fox News he was “not available” for an interview. “In our interview last week with President Trump, he questioned whether his Democratic opponent, Joe Biden, could handle a similar encounter,” Wallace said. “This week, we asked the Biden campaign for an interview and they said the former vice president was not available.” He added, “We’ll keep asking every week.”


The Trump campaign has hit Biden for months for abstaining from holding rallies and news conferences while continuing to do interviews amid the coronavirus pandemic. While Biden recently has returned to the stump, Trump and his allies continued to mock the former vice president for “hiding” in his home in Delaware. Biden’s reticence to do public events, however, has done little to hurt his candidacy as the latest polls had Biden comfortably ahead of Trump both nationally and in key battleground states.

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Wondering how the MSM will cover future indictments, subpoenas etc. Those will come.

More Willful Blindness By The Media On Spying By Obama Administration (Turley)

The Washington press corps seems engaged in a collective demonstration of the legal concept of willful blindness, or deliberately ignoring the facts, following the release of yet another declassified document which directly refutes prior statements about the investigation into Russia collusion. The document shows that FBI officials used a national security briefing of then candidate Donald Trump and his top aides to gather possible evidence for Crossfire Hurricane, its code name for the Russia investigation. It is astonishing that the media refuses to see what is one of the biggest stories in decades. The Obama administration targeted the campaign of the opposing party based on false evidence.

The media covered Obama administration officials ridiculing the suggestions of spying on the Trump campaign and of improper conduct with the Russia investigation. When Attorney General William Barr told the Senate last year that he believed spying did occur, he was lambasted in the media, including by James Comey and others involved in that investigation. The mocking “wow” response of the fired FBI director received extensive coverage. The new document shows that, in summer 2016, FBI agent Joe Pientka briefed Trump campaign advisers Michael Flynn and Chris Christie over national security issues, standard practice ahead of the election. It had a discussion of Russian interference. But this was different.

The document detailing the questions asked by Trump and his aides and their reactions was filed several days after that meeting under Crossfire Hurricane and Crossfire Razor, the FBI investigation of Flynn. The two FBI officials listed who approved the report are Kevin Clinesmith and Peter Strzok. Clinesmith is the former FBI lawyer responsible for the FISA surveillance conducted on members of the Trump campaign. He opposed Trump and sent an email after the election declaring “viva the resistance.” He is now under review for possible criminal charges for altering a FISA court filing. The FBI used Trump adviser Carter Page as the basis for the original FISA application, due to his contacts with Russians. After that surveillance was approved, however, federal officials discredited the collusion allegations and noted that Page was a CIA asset. Clinesmith had allegedly changed the information to state that Page was not working for the CIA.

Strzok is the FBI agent whose violation of FBI rules led Justice Department officials to refer him for possible criminal charges. Strzok did not hide his intense loathing of Trump and famously referenced an “insurance policy” if Trump were to win the election. After FBI officials concluded there was no evidence of any crime by Flynn at the end of 2016, Strzok prevented the closing of the investigation as FBI officials searched for any crime that might be used to charge the incoming national security adviser. Documents show Comey briefed President Obama and Vice President Joe Biden on the investigation shortly before the inauguration of Trump.

Read more …

 

 

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Oct 202019
 
 October 20, 2019  Posted by at 9:45 am Finance Tagged with: , , , , , , , , , , , ,  20 Responses »


Rembrandt van Rijn The three trees 1643

 

Hillary Clinton Bails On DC Event That Tulsi Gabbard Is Attending (NYP)
Dems Introduce Legislation To Block G7 Summit At Trump’s Doral Resort (Fox)
Trump Ditches Plan To Host G7 At Doral Resort: ‘Irrational Hostility’ (G.)
Trump Campaign Mocks Outrage Over Mulvaney Comments With T-Shirts (ZH)
UK PM Sends Unsigned Request For Brexit Delay (BBC)
Brexit Delay And Election Better Than Johnson’s Deal – Farage (R.)
Parliament Tethers Britain to a Failing Experiment (OffG)
“European Values” Is Slang For “European Power” (OffG)
Libor Rigging Inquiry Shut Down By Serious Fraud Office (BBC)
Boeing Board To Meet In Texas As Scrutiny Intensifies (R.)
The Not-Com Bubble Is Popping (Atl.)
Iraq Cleric Sadr Urges Supporters To Continue Anti-Government Protests (Rudaw)
10 Australia MPs Join Forces To Bring Home Julian Assange (DT.au)

 

 

NOTE: none of the people in the clip below have denied beating their wives.

Hillary Clinton Bails On DC Event That Tulsi Gabbard Is Attending (NYP)

It looks like the “Queen of Warmongers” blinked. A face-to-face confrontation between Hillary Clinton and Hawaii Rep. Tulsi Gabbard set for next Friday was averted when Clinton backed out of the Fortune Most Powerful Women Summit in Washington, DC. Clinton aides cited a scheduling conflict when she announced her withdrawal from a speaking slot at the annual event. One insider told Slate that Clinton dropped out to protest the inclusion of former Homeland Security Secretary Kirstjen Nielson on the schedule. But Gabbard is on the bill, too — and Clinton’s pull-out came just hours after the former Secretary of State on Friday accused the Hawaii Democrat of being the “favorite of the Russians” on a podcast.


“I think they’ve got their eye on somebody who is currently in the Democratic primary and are grooming her to be the third-party candidate,” Clinton said. Gabbard fired back with a venomous tweet. “Thank you @HillaryClinton,” she posted. “You, the queen of warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party for so long, have finally come out from behind the curtain.” Gabbard continued the retort during an appearance on Tucker Carlson Tonight: “The reason why she’s doing this is because ultimately she knows she can’t control me. I stand against everything that she represents.”

Read more …

And these people have no idea when they’re being uber trolled. They use their political clout to spend taxpayer money on hot air.

Dems Introduce Legislation To Block G7 Summit At Trump’s Doral Resort (Fox)

A trio of House Democrats introduced legislation Friday to block President Trump from hosting next year’s G7 summit at one of his Florida resorts. Reps. Lois Frankel from Florida, Bennie Thompson from Mississippi and Steve Cohen from Tennessee proposed the Trump’s Heist Undermines the G-7 (THUG) Act. A companion bill sponsored by Sens. Richard Blumenthal, D-Conn., and Sheldon Whitehouse, D-R.I., will be introduced in the Senate, according to lawmakers. The House bill would prohibit funding for the three-day summit at Trump National Doral Golf Club in June. It would also require Trump to submit to Congress documents related to the decision to host the summit at Doral, lawmakers said.


“[Trump] is unashamed of his corruption,” Frankel said in a press release. “He is abusing the office of the presidency and violating law by directing millions of dollars of American and foreign money to his family enterprises by holding an important meeting of world leaders at his Doral resort.” Acting White House Chief of Staff Mick Mulvaney made the announcement on Thursday that next year’s G7 meeting will be held at Doral June 10-12. Mulvaney said the decision will save taxpayers millions because the resort will provide its services at cost. Democratic lawmakers claimed Friday that past G7 summits have cost “upwards of $40 million.”

Read more …

Meanwhile, the press and the Democrats have provided Trump with first of all a big laugh, plus an enormous amount of free advertizing for his resort. And they’re all righteous about it, they celebrate it as a major victory. Here’s the Guardian: “Donald Trump has been forced into a humiliating climbdown”.. Good god. Ditch the blinders.

Trump Ditches Plan To Host G7 At Doral Resort: ‘Irrational Hostility’ (G.)

Donald Trump has been forced into a humiliating climbdown over plans to host the G7 meeting at his own luxury resort following a political outcry. The US president announced in a Saturday night tweet that he had reversed his decision and would seek an alternative venue to host world leaders next June. The move represented a rare admission of defeat by Trump, who typically digs in and fights to defend every controversial statement and policy. Even in his concession, the president complained bitterly that he thought he was “doing something very good for our country” by choosing the Trump National Doral, near Miami, to host G7 leaders.

“It is big, grand, on hundreds of acres, next to Miami international airport, has tremendous ballrooms & meeting rooms, and each delegation would have … its own 50 to 70 unit building,” he tweeted. Trump added that he had announced he would do it at no profit and at no cost to the US but, he claimed, both the media and Democrats had reacted unreasonably. “… Therefore, based on both media & Democrat crazed and irrational hostility, we will no longer consider Trump National Doral, Miami, as the host site for the G-7 in 2020,” the president continued. “We will begin the search for another site, including the possibility of Camp David, immediately. Thank you!”

The choice of the Trump National Doral was widely condemned as the most egregious example yet of the president abusing his position to enrich himself and his business. The resort was in need of a boost: in May the Washington Post reported that Doral’s operating income had fallen 69% since 2015. Trump’s u-turn was welcomed by ethics watchdogs. Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, said: “President Trump’s decision to award the G7 Conference to his own property was outrageous, corrupt and a constitutional violation. “It was stunningly corrupt even for a stunningly corrupt administration. His reversal of that decision is a bow to reality, but does not change how astonishing it was that a president ever thought this was appropriate, or that it was something he could get away with.”

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And of course the trolling continues, certainly after the success of the Doral narrative.

Trump Campaign Mocks Outrage Over Mulvaney Comments With T-Shirts (ZH)

The Trump campaign’s latest trolling (after selling plastic straws and “Where’s Hunter?” T-shirts) comes after acting White House Chief of Staff Mick Mulvaney told reporters last week that there’s “going to be political influence in foreign policy,” suggesting that the media “get over it.” In response, the Trump campaign turned Mulvaney’s comment into yet another T-shirt, as the rest of the media foused on his seeming admission that there was a quid pro quo with Ukraine. “Did he also mention to me in past the corruption related to the DNC server? Absolutely,” Mulvaney told reporters. “No question about that. But that’s it, and that’s why we held up the money.”


This was quickly seized on by White House reporters, who said Mulvaney described a quid pro quo for holding up security assistance to Ukraine unless the country’s alleged involvement with the DNC server was investigated. Mulvaney, later retracted his statement – saying “Let me be clear, there was absolutely no quid pro quo between Ukrainian military aid and any investigation into the 2016 election. The president never told me to withhold any money until the Ukrainians did anything related to the server.”

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Is there anybody left who knows where things stand? This move feels convoluted. 1 million protesters yesterday in London.

UK PM Sends Unsigned Request For Brexit Delay (BBC)

Boris Johnson has sent a request to the EU for a delay to Brexit – but without his signature. The request was accompanied by a second letter, signed by Mr Johnson, which says he believes that a delay would be a mistake. The PM was required by law to ask the EU for an extension to the 31 October deadline after losing a Commons vote. EU Council President Donald Tusk tweeted that he had received the extension request. He added he would now consult EU leaders “on how to react”. Hours after losing a crunch vote in a historic Saturday session in the House of Commons, the prime minister ordered a senior diplomat to send an unsigned photocopy of the request for a delay, which was forced on him by MPs last month.


The second letter from Mr Johnson – signed off this time – makes clear he personally believes a delay would be a mistake. It says the government will press on with efforts to pass the revised Brexit deal agreed with EU leaders last week into law, and that he is confident of doing so by 31 October. A cover note from Sir Tim Barrow, the UK’s representative in Brussels, explained the first letter complied with the law as agreed by Parliament. The prime minister previously said he would “rather be dead in a ditch” than ask the EU to delay Brexit. BBC Political Editor Laura Kuenssberg described the decision to send three documents as “controversial”, predicting “there will be a fight about whether Boris Johnson is trying to circumvent the court”. She added: “This is heading straight for the court, and it may very quickly end up in the Supreme Court.

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Farage thinks he can win bigly in the elction.

Brexit Delay And Election Better Than Johnson’s Deal – Farage (R.)

Brexit Party leader Nigel Farage said on Sunday a short delay to Brexit in order to hold a national election would be better than accepting Prime Minister Boris Johnson’s deal. “I want to leave on the 31 of October, but I’ll warn everybody that if this treaty goes through nothing will have changed at all, and I think far better to have a short delay and a general election where we might solve this,” Farage told Sky News, adding that Johnson’s deal was “rotten” and “not Brexit”.

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I like this from OffGuardian. We need alternative views. Part is on Britain…

Parliament Tethers Britain to a Failing Experiment (OffG)

Brexit isn’t going to happen. Left or Right – Lexit or Rexit – it’s over. It’s time to make peace with that idea. Penned in by the absurd Benn Act, No Deal is off the table, which means Britain will be forced to either remain or accept a deal that’s Remain by another name. The Letwin Ammendment and Johnson’s unsigned extension request are just morbid theatre. Unneccasary nails in a well-sealed coffin. It’s all very Weekend at Bernies’ – A lame cast of characters, puppeteering Brexit’s corpse to keep up a tired joke that was never funny to begin with. Parliament has become an absurd pantomime, where a clown Prime Minister – his majority willfully destroyed – sets up straw men that the “opposition” bayonet with increasingly maniacal glee.

No thought is given to policy or consequences, only increasing the tally of Boris Johnson’s parliamentary defeats. Labour, and the bedraggled, hysterical remainers in the Lib Dems/TIG/Green Party, have become nothing but contrarians – automatically gain-saying anything tabled by the government for the simple joy of humiliating the nation’s Court Jester in Chief. Corbyn has been so successfully gaslighted by his remain-heavy PLP he doesn’t even realise he’s betraying his life-long principles, his mentor Tony Benn, and entire swaths of the Labour’s Northern heartlands, who all voted to leave. When a general election does come, it will mean nothing.

Labour will likely be destroyed as working-class voters either flock to the Brexit Party or simply collapse into the apathy of the voiceless, and stay home. If Labour scrapes together enough voters from Remain country in Scotland and London to claw their way to a small majority, well their socialist manifesto will be crippled by the EU’s austerity policy and restrictions on nationalisation. In either event, Corbyn will be replaced by a New Labour non-entity of little renown and less worth. The papers will declare socialism dead (again), and maybe clap Corbyn on the shoulder for doing “well, considering” and “changing the conversation”.

Read more …

…and Kit Knightly unloads on the EU as well.. (2nd part of same article)

“European Values” Is Slang For “European Power” (OffG)

France is miserable, sick of austerity. Sick of spending cuts and falling standards and neo-liberal economics promising a trickle-down that never seems to come. In Paris – and many other French cities – the Yellow Vests are nearing their fiftieth straight week of protests, and don’t seem to be slowing down (Hopefully they plan something nice for their first birthday). People have lost eyes, hands, even lives. The Hong Kong protests – so long front-page news in the UK – have been a picnic in comparison. In Hungary, an elected President is held hostage by the bureaucracy of the EU. Whatever you think of Orban, he was democratically elected to enact the political promises he made during his campaign.

That Brussels can sanction him, and threaten to remove Hungary’s voting rights, is perverse. Anti-democracy in the name of democracy. They say it’s about “protecting European values”, but is it? That’s pretty hard to believe, considering the situation elsewhere in Europe… Spain will join France in the flames soon. They already sent thirteen politicians to prison for sedition. Take a moment to consider that – actual “sedition”. This comes after sending in riot police to break up a peaceful referendum. Spanish police beat voters, arrested protesters and destroyed ballot boxes. Madrid has faced no punishment, or even criticism, for this. They – unlike Orban – have escaped any sanction or censure.

Police attack Catalonian independence protests on the streets of Barcelona…and Brussels’ silence is deafening. (Imagine Russia had just jailed 13 opposition politicians for sedition. Imagine Maduro was blinding protestors with rubber bullets. The difference in coverage and attitude would be breathtaking.) What is the difference between Budapest and Paris? Or Moscow and Madrid? Well, Orban is anti-EU (as are the Gilets Jaunes). The governments of France and Spain are Pro EU, with a ferocity that fully justifies the capital P. Follow a pro-EU agenda of austerity, uncontrolled immigration and globalisation and you can blind as many protesters as you want. The harder you look, the more it seems “European values” is slang for “European power”.

Read more …

Just a rumor: “The decision comes because of evidence that implicates the Bank of England”

Libor Rigging Inquiry Shut Down By Serious Fraud Office (BBC)

An investigation into the rigging of Libor, the benchmark interest rate that tracks the cost of borrowing cash, has been unexpectedly closed. The decision comes despite evidence that implicates the Bank of England. It means no one will now be prosecuted in the UK for so-called “low-balling”, where banks understate interest rates they pay to borrow cash. The Serious Fraud Office (SFO) said its decision followed a detailed review of the evidence. Thirteen traders and money brokers were prosecuted over four years by the SFO in connection with rigging Libor.


Six have been prosecuted by the US Department of Justice (DoJ). A further 11 traders have been prosecuting for manipulating Euribor, the eurozone equivalent of Libor. The SFO said aspects of its Euribor investigation remain open. In a statement, the SFO said: “Following a thorough investigation and a detailed review of the available evidence, there will be no further charges brought in this case. This decision was taken in line with the test in the Code for Crown Prosecutors.” The code states that the evidence must support a realistic prospect of conviction and must be in the public interest.

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The people who demanded the cost cuts that led to the drama now get together to fire a few 1000 employees. They should first fire themselves.

Boeing Board To Meet In Texas As Scrutiny Intensifies (R.)

Boeing Co’s board of directors and top executives from its airplanes division and supply chain were due to meet on Sunday in San Antonio, Texas, two days after the U.S. planemaker was plunged into a fresh crisis over its banned 737 MAX jet. The meeting comes as pressure mounts on the world’s largest planemaker not only from investigations into the 737 MAX following two deadly crashes, but also from the financial burden caused by the jet’s safety ban and continued high production. Several industry sources said there was speculation inside the company of significant job cuts as Boeing, unable to deliver 737 MAX planes to customers, continues to drain cash.


And although Boeing has so far told suppliers it expects to maintain a production rate of 42 single-aisles monthly with plans to increase to a record level next near, rates may have to come down if regulators further delay the MAX’s return to service, the people said. The schedule for the board’s face-to-face meetings was set for Sunday and Monday in San Antonio, one of the people said, two days before Boeing reports earnings on Oct. 23. The week after, Boeing Chief Executive Officer Dennis Muilenburg – who was stripped of his job as board chairman eight days ago – is due to testify before U.S. Congress about the plane’s development.

Read more …

WeWork is not a mass mania?

The Not-Com Bubble Is Popping (Atl.)

It is easy to look at today’s crop of sinking IPOs—like Uber, Lyft, and Peloton—or scuttled public offerings, like WeWork, and see an eerie resemblance to the dot-com bubble that popped in 2000. Both then and now, consumer-tech companies spent lavishly on advertising and struggled to find a path to profit. Both then and now, companies that bragged about their ability to change the world admitted suddenly that they were running out of money. Both then and now, the valuations of once-heralded tech enterprises were halved in a matter of weeks. Both then and now, there was a widespread sense of euphoria curdling into soberness, washed down with the realization that thousands of workers in once-promising firms were poised to lose their jobs.

But if you look closer, today’s correction isn’t much like the dot-com bubble at all. In fact, it might be more accurate to say that what’s happening today is the very opposite of the dot-com bubble. Let’s first understand what exactly that bubble was: a mania of stock speculation, in which ordinary investors—from taxi drivers to Laundromat owners to shoe-shiners—bid up the price of internet-related companies for no good reason other than “because, internet.” Companies realized that they could boost their stock price by simply adding the prefix e- (as in “e-Bay”) or the suffix com (as in Amazon.com) to their corporate names to entice, and arguably fool, nonprofessionals. “Americans could hardly run an errand without picking up a stock tip,” The New York Times reported in its postmortem.

[..] When the web browser Netscape went public on August 9, 1995—the day many cite as the beginning of the dot-com bubble—its stock skyrocketed from $28 to $75 in a matter of hours, even though the company wasn’t profitable. In today’s market, the opposite is happening: Unicorns with no positive earnings are getting slaughtered at the gates. WeWork’s valuation fell more than 80 percent pre-IPO when investors balked at its mounting losses. Peloton, Lyft, and Uber have also struggled to persuade public markets to grade them on a curve; all saw their stock prices fall on the day of the public offering. Institutions and retail investors are refusing to fork over to unicorns the valuations that private investors were expecting—particularly Softbank, a major backer of Uber, Lyft, and WeWork. This isn’t a picture of mass mania. It’s a picture of public sobriety, where the masses are diagnosing an acute fever in private markets.

Read more …

My list of mass protests yesterday included Chili, Ecuador, Lebanon, Barcelona, France, London, Puerto Rico, Hong Kong. Today we can add Iraq.

Iraq Cleric Sadr Urges Supporters To Continue Anti-Government Protests (Rudaw)

Firebrand Shiite cleric Muqtada al-Sadr has called on Iraqis to resume the nationwide protests against corruption, unemployment, and the lack of public services. Several of Iraq’s central and southern cities, including the capital Baghdad, were rocked by violent protests in early October, which left at least 108 dead and more than 6,000 injured. In a long statement published on his Facebook page late on Saturday, Sadr called on his supporters and the public to return to the streets on Friday, October 25 to resume the protests.


Sadr is head of the Sayirun alliance, the largest bloc in the Iraqi parliament. He is also head of the Saraya al-Salam militia, which is part of Popular Mobilization Forces (PMF) umbrella, also known as Hashd al-Shaabi in Arabic. “The government leaders and politicians are in a state of fear because of you, they are completely unable to fix anything within this country,” Sadr’s statement read. “Therefore, I ask everyone to start the revolution which will clean Iraq from corrupters and fools.” Sadr has withdrawn his backing for the government of Adil Abdul-Mahdi in the wake of the protests and called for fresh elections. He accused Iraq’s top politicians of being under the influence of foreign powers – particularly arch rivals Iran and the United States.

Read more …

Is something positive happening? I’m not holding my breath for Australia to stand up to the US.

10 Australia MPs Join Forces To Bring Home Julian Assange (DT.au)

A group of 10 MPs from across the political spectrum have joined forces to form a Parliamentary Working Group focused on bringing home Wikileaks founder Julian Assange. LNP member George Christensen and independent Andrew Wilkie have agreed to be co-chairs and have put forward the proposed group for approval from the President of the Senate and the Speaker of the House of Representatives. It is understood the group includes Nationals MP Barnaby Joyce, members of the Labor Party and the cross bench. Mr Wilkie told News Corp Australia he hopes the group will raise the profile of Assange’s case and educate the public.

He believes people who may have been wary of Assange because of the rape allegations levelled against him will change their view when they know what is happening. He said Assange has not been charged with rape and the attempts to extradite him to the US have nothing to do with those allegations. Assange, 48, faces 18 counts in the US including conspiring to hack government computers and violating an espionage law. Australian Barrister Greg Barnes, who is acting as an Adviser to the Assange campaign said: “People are quite naive and misunderstand what is going on.” “If the United States get their way, he will probably be tried in secret, in a kangaroo court and given life in jail.”

The formation of the group comes ahead of Assange’s scheduled court appearance in London on Monday and calls for the Federal Government to intervene on Assange’s behalf. Assange is being detained in one of Britain’s toughest prisons Belmarsh and his legal team have warned his health is deteriorating. A full extradition hearing is not expected to go ahead until February. Mr Barnes said it is the first time that the US has sought to use its laws to prosecute a person who did not commit an act in a US jurisdiction or have any links to the US. “It is a dangerous step and it means that any journalist or person who publishes material deemed to be classified under US espionage laws could be prosecuted irrespective of having any link to the US.”

Read more …

 

 

 

 

 

May 182019
 


Edouard Manet Gypsy with a cigarette 1862

 

Half Of Americans Are Just One Paycheck Away From ‘Financial Disaster’ (MW)
Record-Setting Art Sales Confirm Global Liquidity Bubble (Colombo)
A Greek Canary in a Global Goldmine (Varoufakis)
US Media No Longer Reports Facts, But Appeals To Emotions (SHTF)
OPCW Expert Contradicts Official Douma Attack Analysis (CJ)
Free For All (Jim Kunstler)
May And Corbyn Blame Each Other As Brexit Talks Collapse (G.)
Tory Brexiteers Tell May: You Must Quit Now (Ind.)
A Brief History Of Doom: The New Kindleberger And Mackay (Steve Keen)
Cristiano Ronaldo Donates $1.5 million to Palestine for Ramadan (21Wire)
Air Pollution May Be Damaging ‘Every Organ In The Body’ (G.)

 

 

Many such surveys these days.

Half Of Americans Are Just One Paycheck Away From ‘Financial Disaster’ (MW)

Missing more than one paycheck is a one-way ticket to financial hardship for nearly half of the country’s workforce. A new study from NORC at the University of Chicago, an independent social research institution, found that 51% of working adults in the United States would need to access savings to cover necessities if they missed more than one paycheck. [Research from the Federal Reserve found that 4 in 10 Americans couldn’t afford a $400 emergency, and 22% say they expect to forgo payments on some of their bills.]


Certain communities were more prone to economic hardship in the event of missing a paycheck. Roughly two-thirds of households earning less than $30,000 annually and Hispanic households would be unable to cover basic living expenses after missing more than one paycheck, the researchers found. “Even so, notable differences remain across race, ethnicity, education groups, and locations and many individuals still struggle to repay college loans, handle small emergency expenses, and manage retirement savings,” it added. The findings were based on a survey of more than 1,000 adults. The researchers interviewed a nationally representative panel designed to be indicative of the U.S. population.

Read more …

Record numbers of dirt poor Americans while the rich don’t know what to do with their money. Not a recipe for anything long lasting.

Record-Setting Art Sales Confirm Global Liquidity Bubble (Colombo)

Art and collectibles prices have exploded in the past decade as a result of the extremely frothy conditions created by central banks. Hardly a week goes by without news headlines being made about ugly, tacky, or just plain bizarre works of art fetching tens of millions, if not hundreds of millions, of dollars at auction houses like Sotheby’s and Christie’s (often sold to rich buyers in China or Hong Kong). Make no mistake: we’re currently experiencing a massive art bubble of the likes not seen since the Japan-driven art bubble of the late-1980s that ended disastrously. Two art market records were made in the past week: the $91.1 million “Rabbit” sculpture by Jeff Koons, which set the record for the highest amount paid for a piece of art by a living artist, and the sale of Monet’s ‘Meules’ painting for $110.7 million, which set a record for an Impressionist work.


[..] In order to understand today’s art bubble, it is helpful to learn about the art bubble of the late-1980s that ultimately crashed and burned. Throughout the 1980s, Japan had a bubble economy that was driven by debt and bubbles in property and stocks. Japan’s economy was seemingly unstoppable – almost everyone in the West was terrified that Japan’s economy and corporations would trounce ours while destroying our standard of living in the process. Of course, few people knew how unsustainable Japan’s economy was at that time.

As a result of hubris and the enormous amount of liquidity that was flowing throughout Japan’s economy in the late-1980s, Japanese businesspeople and corporations started to speculate in art, often bidding previously unheard of sums that Western art collectors would never have dreamed of paying. For example, Yasuda Fire and Marine Insurance paid a record $39.9 million for Vincent van Gogh’s “Sunflowers” at a London auction in 1987. Ryoei “wild fellow” Saito, Chairman of the Daishowa Paper Manufacturing empire, paid $160 million for the world’s two most expensive paintings – a Van Gogh and a Renoir. At the peak of the art market in 1990, Japan imported more than $4 billion worth of art, including nearly half of all Impressionist art that was on the market. Of course, the art market plunged along with Japan’s bubble economy in the early-1990s.

Read more …

“When vultures grow fat on a corpse, they do not revive it.”

A Greek Canary in a Global Goldmine (Varoufakis)

The eurozone country that has become synonymous with insolvency is today proving to be a treasure-trove for some. Traders who bought Greek assets a few years ago have good reason to celebrate, having banked returns that no other market could have provided. But, as is often the case, an opportunity that seems too good to be true probably is. And this one could portend the next phase of our global crisis. An investor who bought German government bonds in 2013 has, by now, gained a 7% return, whereas a buyer of a Greek government bond issued at the height of the country’s debt crisis in 2012 would have earned a colossal 231% return. Two months ago, the price of the first ten-year bond issued since Greece’s bailout in 2010 surged for seven consecutive days, rising by 2.8% in a week – a better performance than any other government bond issue worldwide.

That bond rally created a psychological slipstream, which, in recent months, pulled the Athens Stock Exchange 26% higher, against the background of a European asset market inexorably bleeding capital. On the strength of these impressive numbers, it is as tempting as it would be false to herald the end of Greece’s crisis. The Greek bond and equity rally is obscuring a growing chasm between a gloomy economic reality and an unsustainably buoyant financial climate. Rather than reflecting Greece’s recovery, the traders’ high profit margins mirror continued deflationary pressures and fragmentation in Europe within a global environment of decreasing debt sustainability. The numbers from Greece, so exciting to investors far and wide, may well prove a harbinger of fresh troubles for Europe’s economy, and perhaps for the world.

Given the gaping gap between Greece’s nominal national income and its public debt, how is it possible that Greek bonds are soaring? Why is the Athens Stock Exchange rising while business remains hampered by punitive taxation, banks labor under a mountain of non-performing loans, declining unemployment reflects only emigration and some precarious jobs, net public investment is negative, and private investment in production of high value-added tradable goods is absent?

One reason is the proverbial dead-cat-bounce. Given how thin Greece’s equity market is – total capitalization is €52 billion ($58 billion) – the modest influx of capital that came in the wake of the bond rally was enough to drive the 26% rise in its index. But, despite this surge, the Greek market remains 81% below its 2009 level. As for the bond rally itself, the paradox quickly disappears once we recall how the first two bailouts shifted Greek public debt from the private sector to the shoulders of Europe’s taxpayers.

Read more …

I’m very happy I’m not the only one having signaled this for 2+ years. It’s almost worth being called a Trump supporter for. Though that is still an utterly ridiculous allegation in my case. But this is the most dangerous tendency in American society today, not Trump.

US Media No Longer Reports Facts, But Appeals To Emotions (SHTF)

The mainstream media in the United States has made a shift in the past few decades. Now, they appeal to emotions as opposed to reporting the facts. This “cultural schizophrenia” is tearing the U.S. apart at the seams. Based on the conclusions to a RAND Corporation study, the mainstream media is actively sowing discord in American society, award-winning journalist Chris Hedges tells RT. The media is focusing on making two sides hate each other instead of reporting on the facts, and the majority of the public is unaware and doesn’t care that their minds are being manipulated by their own emotional responses.

The study, which was released by RAND earlier this week, states that between 1987 and 2017, news content has shifted from event- and context-based reporting to coverage that is “more subjective, relies more heavily on argumentation and advocacy, and includes more emotional appeals.” According to RT, prime-time cable news shows and online journalism lead the way in this shift to emotional and hate-based rhetoric. It has been noticed in print journalism as well, the government-funded think tank concluded. This is contributing to what RAND termed “Truth Decay.” This is described as a shift away from facts and analysis in public discourse.

Hedges claims that the deterioration of the mainstream media is “far worse” than the RAND report suggests. And he isn’t alone in that assessment. [American journalist Matt]Taibbi says that the result of this journalistic decay and emotional fear mongering is a public addicted to hating each other. Americans have become addicted to the news that agrees with their bias, and it was set up that way on purpose. The only thing anyone will hear when they turn on the news are stories specifically crafted to manufacture outrage, make you hate the other side, and fuel the addiction to anger. –SHTFPlan

[..] It is becoming difficult to tell apart facts and opinion now, and people believe whatever they want to believe, Hedges explained. “We spent years watching CNN and MSNBC promoting this conspiracy theory that Trump was a Kremlin agent… It was all garbage but it attracted viewers,” Hedges added as an example. And, if you don’t mind your IQ dropping, turn on MSNBC for just a few minutes. It’s likely you’ll still hear something about Russiagate to keep the public pissed off beyond comprehension.

Read more …

OPCW gone. White Helmets gone. Skripal narrative gone. This is why Assange is so needed. Because we wouldn’t know these things if not for leaks. Assange built the infrastructure for them.

Note: some publications say this concerns an OPCW article. It is not, they tried to hide it.

OPCW Expert Contradicts Official Douma Attack Analysis (CJ)

[..] a few days ago the Working Group on Syria, Propaganda and Media (WGSPM) published a document signed by a man named Ian Henderson, whose name is seen listed in expert leadership positions on OPCW documents from as far back as 1998 and as recently as 2018. It’s unknown who leaked the document and what other media organizations they may have tried to send it to. The report picks apart the extremely shaky physics and narratives of the official OPCW analysis on the gas cylinders allegedly dropped from Syrian government aircraft in the Douma attack, and concludes that “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft,” saying instead that manual placement of the cylinders in the locations investigators found them in is “the only plausible explanation for observations at the scene.”

[..] the kindest possible interpretation of these revelations is that an expert who has worked with the OPCW for decades gave an engineering assessment which directly contradicted the official findings of the OPCW on Douma, but OPCW officials didn’t find his assessment convincing for whatever reason and hid every trace of it from public view. That’s the least sinister possibility: that a sharp dissent from a distinguished expert within the OPCW’s own investigation was completely hidden from the public because the people calling the shots at the OPCW didn’t want to confuse us with a perspective they didn’t find credible.

This most charitable interpretation possible is damningly unacceptable by itself, because the public should obviously be kept informed of any possible evidence which may contradict the reasons they were fed to justify an act of war by powerful governments. And there are many far less charitable interpretations. It is not in the slightest bit unreasonable to speculate that the ostensibly independent OPCW in fact serves the interests of the US-centralized power alliance, and that it suppressed the Henderson report because it pokes holes in the narratives that are used to demonize a longtime target for imperialist regime change. That is a perfectly reasonable possibility for us to wonder about, and the onus is now on the OPCW to prove to us that it is not the case.

Either way, the fact that the OPCW kept Henderson’s findings from receiving not a whisper of attention severely undermines the organization’s credibility, not just with regard to Douma but with regard to everything, including the establishment Syria narrative as a whole and the Skripal case in the UK. Everything the OPCW has ever concluded about alleged chemical usage around the world is now subject to very legitimate skepticism. “The leaked OPCW engineers’ assessment is confirmed as genuine, which means the final report actively concealed evidence that the Douma chemical attack was staged by jihadists and the White Helmets,” tweeted British journalist Jonathan Cook. “The OPCW’s other Syria reports must now be treated as worthless too.”

Read more …

“Both countries have borrowed themselves into a Twilight Zone of unpayable debt. Both countries are sunk in untenable economic and banking rackets to cover up their insolvency.”

Free For All (Jim Kunstler)

Here’s what will actually happen. These House majority committee chiefs are going to quit their blustering over the next week or so as they discover there is no political value — and plenty of political hazard — in extending the RussiaGate circus. In the meantime, a titanic juridical machine, already a’grinding, will discredit the whole sordid affair and send a number of hapless participants to the federal ping-pong academies. And by then, the long-suffering citizenry will barely give a shit because we will have entered the climactic phase of the Fourth Turning (or Long Emergency, take your pick), in which the operations of everyday business and governance in this country seriously crumble. The Golden Golem of Greatness will be blamed for most of that.


The internal contradictions of Globalism were already blowing up trade and financial relations between the US and China. The Trump tariffs just amount to a clumsy recognition of the fatal imbalances long at work there. As a 25 percent tax on countless Chinese products, the tariffs will punish American shoppers as much as the Chinese manufacturers. Trade wars have a way of escalating into more kinetic conflicts. The sad truth is that both China and the US are beset by dangerous fragilities. Both countries have borrowed themselves into a Twilight Zone of unpayable debt. Both countries are sunk in untenable economic and banking rackets to cover up their insolvency. China’s fate hangs on distant energy supply lines that run through bottlenecks like the Straits of Hormuz and the Straits of Molucca.

Read more …

They just wasted another 6 weeks, that’s all there is to say.

May And Corbyn Blame Each Other As Brexit Talks Collapse (G.)

The government and Labour have sought to blame each other after cross-party talks to find a compromise Brexit plan collapsed, leaving any remaining hopes of an imminent solution to the impasse in tatters. While both sides insisted the discussions had taken place in good faith, Theresa May said a sticking point had been Labour splits over a second referendum. Labour in turn said the government had been unwilling to compromise and that May’s imminent departure from Downing Street meant there was no guarantee any promises would be kept by a successor such as Boris Johnson. Nick Boles, the former Conservative MP who helped spearhead efforts to prevent a no-deal Brexit in March, said he now feared such a departure was almost inevitable when the EU27’s latest deadline of 31 October is reached.


“It’s game over,” he said. “We only won by one, and it’s very unclear that we would have the same level of Tory support, and for that matter Labour support. We are absolutely convinced that parliament will not find a way to stop no-deal Brexit.” The conclusion to six weeks of intermittent talks, which had angered many Conservative and Labour MPs who feared the nature of the compromise that might result, came with the release of a letter from Jeremy Corbyn to May on Friday. Despite praising the talks as constructive, the Labour leader wrote: “It has become clear that, while there are some areas where compromise has been possible, we have been unable to bridge important policy gaps between us. “Even more crucially, the increasing weakness and instability of your government means there cannot be confidence in securing whatever might be agreed between us.”

Read more …

We’re going to have Boris Johnson next. That will not end well.

Tory Brexiteers Tell May: You Must Quit Now (Ind.)

Theresa May is facing growing clamour from within her own party to quit immediately as prime minister, after the collapse of Brexit talks with Labour sounded the death knell for her EU withdrawal plans. With Tories trailing in fifth place on a humiliating 9 per cent in one poll for next week’s European parliament elections, furious backbenchers predicted certain defeat when the Withdrawal Agreement Bill comes before the Commons in June. Brexiteers said there was no prospect of Ms May averting a “significant” rebellion by tacking towards them on totemic issues like the Irish backstop and free trade. “There’s nothing she can say,” said one former minister. “No one trusts her any more.”


[..] senior Leave-supporting backbenchers said she should scrap the legislation and hand over immediately to a new leader.Nigel Evans urged her to announce she was not waiting three weeks to discuss the timetable for her departure, as agreed with the chair of the influential 1922 Committee Sir Graham Brady, but would go “forthwith”. Asked if the declaration should come within days, the committee’s joint secretary replied: “I would like her to do it now … It’s only right that the new leadership has the opportunity to become established and form a new cabinet prior to us going into the summer recess.” Former minister David Jones said the PM should recognise that “now is the time that she should stand down”. “On the Conservative benches, most people now want the PM to step down as quickly as possible,” he told The Independent. “Prolonging this is just wasting time at a time when we don’t have much time to waste.”

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A must read, I gather.

A Brief History Of Doom: The New Kindleberger And Mackay (Steve Keen)

“If readers take one lesson from this book, I hope it is this: when it comes to financial crises, we’re not in the grip of unseen and hopelessly complex forces. Such crises are neither inevitable nor unpredictable. Runaway private debt and the resulting overcapacity does a better job than any other variable in explaining and predicting financial crises. It is our job to heed those danger signs.” (Vague 2019, p. ix)


This brief book (196 pages, excluding endnotes) on the history and causes of financial crises usurps Kindleberger’s Manias, Panics, and Crashes (Kindleberger 1978) and Mackay’s Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (Mackay 1852) as the definitive work on this vital topic. It surpasses both these works for several reasons, not the least of which is the career and experience of the author. Mackay was a journalist and gifted writer; Kindleberger, an economist with an impressive record in both public service and academia. Both of them observed financial manias and crashes from their respective professional perches, outside the financial system itself.

Vague is an ex-banker, whose fortune was carved in the financial crisis emanating from the bursting of the 1979 oil shock bubble, whose hands-on management established two of America’s biggest consumer credit card companies (First USA, which he sold Bank One in 1997, and Juniper Financial, which he sold to Barclays PLC in 2004), and whose professional access to the voluminous data he saw on the explosion in mortgage debt – from $6 trillion in 2002 to $9 trillion in 2005 – led him to anticipate the Subprime Crisis and exit banking altogether. Vague has seen financial crises from the inside – and not merely survived but prospered.


In the hands of most Americans, this experience would lead to a “How to Get Rich” book. Vague’s ambition with this book is very different: to make society richer by understanding what causes financial crises, and thereby preventing them in the first place. Vague’s banker’s perspective gives him an incomparable advantage over not only MacKay and Kindleberger, but over me as well: having seen the booms and busts of banking from the inside, he knew where to look, and what to look for. For example, I dismissed the possibility of a real-estate bubble as a catalyst to the Great Depression, because Robert Shiller’s data (Figure 1) seemed to show that house prices were flat during the 1920s, and if anything, declining. That was as far as my investigations went.

Read more …

He must be on some hit lists.

Cristiano Ronaldo Donates $1.5 million to Palestine for Ramadan (21Wire)

Portuguese footballer and Juventus striker , Cristiano Ronaldo, has donated US $1.5 million to people of Palestine during the holy month of Ramadan. Regarded as one of the world’s greatest-ever professional football players, Ronaldo is said to have made his generous donation in solidarity with the Palestinian people suffering en mass, and in particular the millions who are currently suffering under the brutal punitive ‘air, land and sea’ economic and humanitarian blockade in Gaza – where Israeli forces have been conducting regular bombing raids which have killed thousands of innocent civilians in recent years. Although sports media rarely highlights this facet of the soccer star, Ronaldo has always been close to the Palestinian cause, publicly rejecting the illegal and genocidal incursions of the Israeli regime on several occasions.


In November 2012, while Gaza was being blanketed with bombs by Israel in their Operation Pillar of Defense, Ronaldo auctioned off his Golden Boot, the prestigious award given to the best European strikers of the season, to raise funds that were later donated to the Palestinian children. The following year, in March 2013, at the end of the match between Portugal and Israel for the 2014 World Cup qualifiers, he refused to exchange his shirt with an Israeli player. Although he shook hands, he excused himself by explaining that he could not wear a shirt with that country’s flag, as reported in the press.

Read more …

Keep driving.

Air Pollution May Be Damaging ‘Every Organ In The Body’ (G.)

Air pollution may be damaging every organ and virtually every cell in the human body, according to a comprehensive new global review. The research shows head-to-toe harm, from heart and lung disease to diabetes and dementia, and from liver problems and bladder cancer to brittle bones and damaged skin. Fertility, foetuses and children are also affected by toxic air, the review found. The systemic damage is the result of pollutants causing inflammation that then floods through the body and ultrafine particles being carried around the body by the bloodstream. Air pollution is a “public health emergency”, according to the World Health Organization, with more than 90% of the global population enduring toxic outdoor air. New analysis indicates 8.8m early deaths each year – double earlier estimates – making air pollution a bigger killer than tobacco smoking.


But the impact of different pollutants on many ailments remains to be established, suggesting well-known heart and lung damage is only “the tip of the iceberg”. “Air pollution can harm acutely, as well as chronically, potentially affecting every organ in the body,” conclude the scientists from the Forum of International Respiratory Societies in the two review papers, published in the journal Chest. “Ultrafine particles pass through the [lungs], are readily picked up by cells, and carried via the bloodstream to expose virtually all cells in the body.” Prof Dean Schraufnagel, at the University of Illinois at Chicago and who led the reviews, said: “I wouldn’t be surprised if almost every organ was affected. If something is missing [from the review] it is probably because there was no research yet.”

Read more …

 

Australia has elections this weekend

https://twitter.com/i/status/1129530852000403457

 

 

 

 

Jan 062019
 


Rembrandt van Rijn Man with a falcon on his wrist (possibly St. Bavo) 1661

 

This Fed thing just keeps going on, and it needs to stop. There is nothing in the discussion about the Federal Reserve these days that has any value other than it provides even more proof that the Fed has killed off the most essential elements of what once made the US economy function. All markets, stocks, bonds, housing markets, all price discovery, all murdered. No heartbeat. Pining for the fjords.

And instead of addressing that, and I’m not even talking about addressing fixing what is wrong, all I see is neverending stuff about Jay Powell using, or not using, terms such as “patient” or “accommodative”. Like any of it means anything coming from him and his ilk. Other than for making ‘investors’ a quick buck. Like a quick buck could ever trump the survival of entire market systems.

People discussing whether Jay Powell is doing a good job all miss the point. Because Powell should not be doing that job in the first place. The Fed should not have the power to manipulate the US economy anywhere near as much as it does. Because that power is perverting America like nothing else, and the US economy will never recover as long as the Fed holds that power. Is that clear enough? Do we understand that at least?

 

Powell apparently changed his tune Friday in order to let the mirage that the stock market has become, live another day. Almost literally a day, since it will come crumbling down no matter what he does, just a day or so later. It’s all some message hidden in his use of “patience” or “accommodative”. Nothing he does will have any effect in the medium or longer term, and he knows it.

The entire US economy today is about the quick buck. It’s about tomorrow morning only because nobody has the guts to look at 10 years from now. That makes Jay Powell and his whole Federistas staff worse than useless. It makes no difference if perhaps jobs are doing well; the pre-Powell Fed launched a bubble and that bubble will burst one day, a whole series of them will.

The only good thing he can do is get out of the way and let the markets be the markets, to let them discover prices by letting people interact with people. But who exactly in the US has the power to make the Fed go away?

If you were one of the people who thought Jerome Powell was different from the rest of the Fed head honchos, the ones who preceded him, and I’m by no means just talking Greenspan, Bernanke and Yellen, you can now consider yourself corrected.

Powell is not going to keep hiking rates if a bunch of zombie markets keep falling like they did in December 2018, even though that’s just what we should want zombies to do, and even if hiking is the only way to resurrect a degree of normality and functionality into the markets.

Greenspan, Bernanke and Yellen, by the way, like Powell, just serve(d) to give the beast a human face, and one that the actual power brokers can hide behind. Over the past nigh 106 years since the blinded wagons rode to Jekyll island, the individual brokers may have died their natural deaths, but the institution they represented and served blindly, never did.

Seen in that light, the Fed was/is a kind of a forerunner of the 2010 Citizens United legislation that granted corporations the same rights as individual citizens. The -perverse- sense, that is, in which citizens do die, but corporations do not. So they are much more, and much more powerful, than citizens. Citizens Limited should have set a time limit, like the ones all corporations used to have, and the Fed should have had the shortest and strictest limit of all.

And you were worried about Brett Kavanaugh being named to the Supreme Court…

 

Just as an example of how wrong we get these things these days, Let’s turn to Sven Henrich’s piece in MarketWatch this weekend. Henrich is the founder and lead market strategist of NorthmanTrader.com, and g-d bless him, I’m sure he means well, but he gets things so upside down it’s not funny. He writes about that quick buck only, and doesn’t see the future.

It’s like Danielle DiMartino Booth writing on Twitter Friday: “In one word Powell CAVED to pressure 16 days after a taking hard line. The one thing he did do he should have done after last FOMC meeting was convey that the Fed would truly be data dependent going forward. “Gradual” needs to go. Winner: Stock Market. Loser: Powell’s Credibility”.

Danielle is great, and probably much smarter than I am, but she’s also a former Fed employee, and that brings a shade of blindness with it. What are the odds that she will state anytime soon that the Fed can only, possibly, make things worse for the American economy? I don’t think those odds are good.

Back to Sven Henrich. In essence, it’s ridiculous that a news outlet like MarketWatch still has the guts to publish a piece like his, or that someone like him has the guts to write it. Because it means there still are people, perhaps the author(s) and editors among them, who haven’t yet understood what has happened, even after 10 years and change. They are people who think the Fed can do right, that they can fix things if only they find the right policies.

We have to get rid of this illusion because the Fed will not, can not, fix what is wrong with the economy, or the ‘markets for that matter. Quite the contrary, the Fed can only make things worse. We know this because the only way the markets can be fixed, brought back to life indeed, is to let them function, and the only way they can function is when they can discover what things, stocks, bonds, homes etc., are worth, without some unit with unlimited financial power interrupting.

Central banks are founded for one reason only: to save banks from bankruptcy, invariably at the cost of society at large. They’ll bring down markets and societies just to make sure banks don’t go under. They’ll also, and even, do that when these banks have taken insane risks. It’s a battle societies can’t possibly win as long as central banks can raise unlimited amounts of ‘money’ and shove it into private banks. Ergo: societies can’t survive the existence of a central bank that serves the interests of its private banks.

Henrich:

 

Stock-Market Investors, It’s Time To Hear The Ugly Truth

For years critics of U.S. central-bank policy have been dismissed as Negative Nellies, but the ugly truth is staring us in the face: Stock-market advances remain a game of artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up. As I’ve been saying for a long time: There is zero evidence that markets can make or sustain new highs without some sort of intervention on the side of central banks. None. Zero. Zilch. And don’t think this is hyperbole on my part. I will, of course, present evidence.

In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one), which was introduced following the initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the European Central Bank and the Bank of Japan:

When did global central-bank balance sheets peak? Early 2018. When did global markets peak? January 2018. And don’t think the Fed was not still active in the jawboning business despite QE3 ending. After all, their official language remained “accommodative” and their interest-rate increase schedule was the slowest in history, cautious and tinkering so as not to upset the markets.

With tax cuts coming into the U.S. economy in early 2018, along with record buybacks, the markets at first ignored the beginning of QT (quantitative tightening), but then it all changed. And guess what changed? Two things. In September 2018, for the first time in 10 years, the U.S. central bank’s Federal Open Market Committee (FOMC) removed one little word from its policy stance: “accommodative.” And the Fed increased its QT program. When did U.S. markets peak? September 2018.

[..] don’t mistake this rally for anything but for what it really is: Central banks again coming to the rescue of stressed markets. Their action and words matter in heavily oversold markets. But the reality remains, artificial liquidity is coming out of these markets. [..] What’s the larger message here? Free-market price discovery would require a full accounting of market bubbles and the realities of structural problems, which remain unresolved. Central banks exist to prevent the consequences of excess to come to fruition and give license to politicians to avoid addressing structural problems.

 

is it $15 trillion, or is it 20, or 30? How much did China add to the total? And for what? How much of it has been invested in productivity? I bet you it’s not even 10%. The rest has just been wasted on a facade of a functioning economy. Those facades tend to get terribly expensive.

Western economies would have shrunk into negative GDP growth if not for the $15-20 trillion their central banks injected over the past decade. And that is seen, or rather presented, as something so terrible you got to do anything to prevent it from happening. As if it’s completely natural, and desirable, for an economy to grow forever.

It isn’t and it won’t happen, but keeping the illusion alive serves to allow the rich to put their riches in a safe place, to increase inequality and to prepare those who need it least to save most to ride out the storm they themselves are creating and deepening. And everyone else can go stuff themselves.

And sure, perhaps a central bank could have some function that benefits society. It’s just that none of them ever do, do they? Central banks benefit private banks, and since the latter have for some braindead reason been gifted with the power to issue our money, while we could have just as well done that ourselves, the circle is round and we ain’t in it.

No, the Fed doesn’t hide the ugly truth. The Fed is that ugly truth. And if we don’t get rid of it, it will get a lot uglier still before the entire edifice falls to pieces. This is not complicated stuff, that’s just what you’re made to believe. Nobody needs the Fed who doesn’t want to pervert markets and society, it is that simple.

 

 

Aug 062018
 
 August 6, 2018  Posted by at 9:20 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Vasily Polenov Étretat 1874

 

Stock Market Manias of the Past vs the Echo Bubble (Tenebrarum)
US Bond Market Takes Looming Treasuries Deluge In Stride (R.)
America 10 Years After The Financial Crisis (NYMag)
Nassim Taleb: ‘No One Who Caused The Crisis Paid Any Price’ (ST)
Fears Of A ‘Car-Crash Brexit’ Make Life Difficult For Mark Carney (G.)
Rich, Reckless Brexit Zealots Are Fighting A New Class War (G.)
Saudi Expels Canadian Envoy, Recalls Its Own Over ‘Interference’ (AFP)
Chinese State Media Slams Trump For ‘Extortion’ In Trade Dispute (R.)
Wells Fargo Blames Computer Glitch For Customers Losing Homes (Hill)
Russian Gas Is A Problem For Germany (R.)

 

 

Buybacks prop up ever weaker stocks.

Stock Market Manias of the Past vs the Echo Bubble (Tenebrarum)

The diverging performance of major US stock market indexes which has been in place since the late January peak in DJIA and SPX has become even more extreme in recent months. In terms of duration and extent it is one of the most pronounced such divergences in history. It also happens to be accompanied by weakening market internals, some of the most extreme sentiment and positioning readings ever seen and an ever more hostile monetary backdrop. The above combination is consistent with a market close to a major peak – although one must always keep in mind that divergences can become even more pronounced – as was for instance demonstrated on occasion of the technology sector blow-off in late 1999 – 2000.

Along similar lines, extremes in valuations can persist for a very long time as well and reach previously unimaginable levels. The Nikkei of the late 1980s is a pertinent example for this. Incidentally, the current stock buyback craze is highly reminiscent of the 1980s Japanese financial engineering method known as keiretsu or zaibatsu, as it invites the very same rationalizations. We recall vividly that it was argued in the 1980s that despite their obscene overvaluation, Japanese stocks could “never decline” because Japanese companies would prop up each other’s stocks. Today we often read or hear that overvalued US stocks cannot possibly decline because companies will keep propping up their own stocks with buybacks.

Of course this propping up of stock prices occurs amid a rather concerning deterioration in median corporate balance sheet strength, as corporate debt has exploded into the blue yonder (just as it did in Japan in the late 1980s). The fact that an unprecedented number of companies is a single notch downgrade away from a junk rating should give sleepless nights to fixed income and stock market investors alike – as should the oncoming “wall of maturities”. A giant wall of junk bond maturities is looming in the not to distant future. Unless investors remain in a mood to refinance all comers, this threatens to provide us with a spot of “interesting times”. Something tells us that “QT” could turn into a bit of a party pooper as the “Great Wall” approaches.

It should also be mentioned that past stock market peaks as a rule coincided with record highs in buybacks. This indicates that record highs in buybacks are mainly a contrarian indicator rather than a datum providing comfort at extreme points. Of course, what actually represents an “extreme point” can only ever be known with certainty in hindsight, as extremes tend to shift over time – particularly in a fiat money system in which the supply of money and credit can be expanded willy-nilly. What can be stated with certainty is only whether the markets are entering what we would call dangerous territory.

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But the Fed is retreating.

US Bond Market Takes Looming Treasuries Deluge In Stride (R.)

U.S. government debt supply will likely continue to boom, but bond market investors seem to be taking it in stride. The Treasury Department is having to sell more debt to finance the government’s ballooning deficit, stemming from the massive federal tax overhaul in December and the spending deal passed in February. Still, bond yields have remained in a narrow range, suggesting investors may not be fretting about the swelling debt supply. “There will be no relief from supply especially from bills going into October,” said Tom Simons, money market strategist at Jefferies & Co in New York. Supply is expected to run high at least until the Treasury provides updated forecasts on its borrowing needs, next due in November – and might even accelerate further.

This week, the Treasury will sell $34 billion in three-year notes, with $26 billion in 10-year debt on Wednesday and $18 billion in 30-year bonds on Thursday. It will also auction $51 billion in three-month bills and $45 billion in six-month bills, together with an expected $65 billion in one-month bills. The supply will fall short of a record week of $294 billion set in March but continues a trend higher since February. Analysts, who said the market would have no trouble digesting this week’s offerings, see the government as becoming increasingly dependent on private investors for cash as the Fed further reduces its bond holdings. The goal is to shrink a balance sheet that had grown to more than $4 trillion from three massive rounds of asset purchases to combat the previous recession.

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“That loose civic concept known as the American Dream [..] has been shattered.”

America 10 Years After The Financial Crisis (NYMag)

If you were standing in the smoldering ashes of 9/11 trying to peer into the future, you might have been overjoyed to discover this happy snapshot of 2018: There has been no subsequent major terrorist attack on America from Al Qaeda or its heirs. American troops are not committed en masse to any ground war. American workers are enjoying a blissful 4 percent unemployment rate. The investment class and humble 401(k) holders alike are beneficiaries of a rising GDP and booming stock market that, as measured by the Dow, is up some 250 percent since its September 10, 2001, close. The most admired person in America, according to Gallup, is the nation’s first African-American president, a man no one had heard of and a phenomenon no one could have imagined at the century’s dawn. Comedy, the one art whose currency is laughter, is the culture’s greatest growth industry. What’s not to like?

Plenty, as it turns out. The mood in America is arguably as dark as it has ever been in the modern era. The birthrate is at a record low, and the suicide rate is at a 30-year high; mass shootings and opioid overdoses are ubiquitous. In the aftermath of 9/11, the initial shock and horror soon gave way to a semblance of national unity in support of a president whose electoral legitimacy had been bitterly contested only a year earlier. Today’s America is instead marked by fear and despair more akin to what followed the crash of 1929, when unprecedented millions of Americans lost their jobs and homes after the implosion of businesses ranging in scale from big banks to family farms.

It’s not hard to pinpoint the dawn of this deep gloom: It arrived in September 2008, when the collapse of Lehman Brothers kicked off the Great Recession that proved to be a more lasting existential threat to America than the terrorist attack of seven Septembers earlier. The shadow it would cast is so dark that a decade later, even our current run of ostensible prosperity and peace does not mitigate the one conviction that still unites all Americans: Everything in the country is broken. Not just Washington, which failed to prevent the financial catastrophe and has done little to protect us from the next, but also race relations, health care, education, institutional religion, law enforcement, the physical infrastructure, the news media, the bedrock virtues of civility and community. Nearly everything has turned to crap, it seems, except Peak TV (for those who can afford it).

That loose civic concept known as the American Dream — initially popularized during the Great Depression by the historian James Truslow Adams in his Epic of America — has been shattered. No longer is lip service paid to the credo, however sentimental, that a vast country, for all its racial and sectarian divides, might somewhere in its DNA have a shared core of values that could pull it out of any mess. Dead and buried as well is the companion assumption that over the long term a rising economic tide would lift all Americans in equal measure. When that tide pulled back in 2008 to reveal the ruins underneath, the country got an indelible picture of just how much inequality had been banked by the top one percent over decades, how many false promises to the other 99 percent had been broken, and how many central American institutions, whether governmental, financial, or corporate, had betrayed the trust the public had placed in them. And when we went down, we took much of the West with us. The American Kool-Aid we’d exported since the Marshall Plan, that limitless faith in progress and profits, had been exposed as a cruel illusion.

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“If anything, banks today are even more on government support.”

Nassim Taleb: ‘No One Who Caused The Crisis Paid Any Price’ (ST)

A year or so after the 2008 crisis, Nassim Taleb, a financial trader turned bestselling author, was called to Washington to talk to a commission that was compiling a report on what went wrong. Taleb, after all, had predicted the crisis with eerie prescience in his 2007 book The Black Swan, which talked about the underappreciated “tail risks” faced by the global economy. “They heckled me for about two or three hours on technicalities,” he recalls. “But not a single one of my points was in the report. Bunch of f****** bureaucrats. No wonder people voted for Donald Trump.” Taleb believes we have learnt nothing from the crisis. “Not only did people not get why it happened,” he says, “but the moral hazard in the system actually increased.”

The problem, in Taleb’s view, is what he calls a “Bob Rubin trade”. In the build-up to the crash, Robert Rubin, a former Treasury secretary under Bill Clinton, spent years advising the investment bank Citigroup, eventually becoming its chairman. After the crash happened, he resigned and walked away having made tens of millions. “What’s most depressing is that nobody who was involved in causing the crisis paid any price for it,” Taleb says. “America’s debt is now trillions higher because people transferred risk to the state, owing to mistakes made by individuals.” The crisis highlighted the licence to take risk that banks had, knowing the government would step in if things went wrong.

“People realised that, hey, you can do that with impunity,” Taleb says. “If anything, banks today are even more on government support.” He does identify one bright spot. “Some people have realised there was a problem,” he says. “There is an immense amount of disgruntlement by people who see this point, on the left in Europe and on the right in America. “So you have what is mislabelled ‘populism’ as a first-order reaction, which may be correct or incorrect. But at least some people are starting to see these methods are bullshit.”

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Yet another variation of Brexit.

Fears Of A ‘Car-Crash Brexit’ Make Life Difficult For Mark Carney (G.)

There may be times when Mark Carney regrets extending his stint at the Bank of England by an extra year. Had things gone as originally planned, Carney would have handed over the keys to Threadneedle Street a month ago and someone else would have had the task of steering the economy through what is certain to be a fiendishly tricky period. That would be the case even without Brexit. The UK economy has recovered more slowly and more unevenly than Carney envisaged when he took over at the Bank from Mervyn King in 2013. It was only last week that the Bank’s monetary policy committee felt confident enough to raise interest rates above the 0.5% emergency level that they reached in March 2009.

But Brexit is taking up half the governor’s time and it is clear that he is starting to get concerned. Certainly, his remarks when questioned on the BBC Today programme on Friday were blunt. With just eight months to go before Britain leaves the European Union, the risk of a no-deal Brexit is “uncomfortably high”. There was a time when such plain speaking from the governor of the Bank of England would have raised a few eyebrows in Downing Street. Not now. The line since the cabinet signed up to Theresa May’s soft Brexit plan is that the government has made all the concessions it can, and that means unless Brussels gives something in return there is a danger of chaos next March.

So the prime minister would not have been troubled when Carney said that a no-deal Brexit would be “highly undesirable” and something all parties should seek to avoid, because that’s the official Whitehall line. There will be no complaints if the governor continues to stress the importance of London as a source of low-cost capital for European governments and companies.

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Britain reveals what it really is.

Rich, Reckless Brexit Zealots Are Fighting A New Class War (G.)

We now know it beyond doubt: however we leave the European Union, the result is likely to be damage that Britain is in no position to absorb. Job losses are certain. A stack of Brexit impact reports from local authorities obtained last week by Sky News identified a catalogue of dire consequences, from farms in Shetland that could be plunged into impossible losses, through social care services in East Sussex already being hit by labour shortages, to the M26 being turned into a giant lorry park. With his characteristic emollience, the trade secretary, Liam Fox, says a no-deal Brexit is now more likely than a negotiated deal; Jeremy Hunt reckons we could fall off the came cliff-edge “by accident”, and reports about stockpiled food and medicines attest to the awfulness of any such prospect.

March 2019, then, could well mark a watershed point in a drawn-out disaster. But so, in a different way, could somehow nullifying the result of the referendum and staying put. It would be comforting to think that what George Orwell called “the gentleness of the English civilisation” would mean that an overturning of 2016’s outcome would be grudgingly swallowed by the vast majority of leave voters, but I would not be so sure. Ukip is back in the polls, and has newly strengthened links to the far right. A couple of weeks ago, I was in Boston in Lincolnshire, the town whose 75.6% vote for Brexit made it the most leave-supporting place in the UK. Many of the people I spoke to were already convinced that Brexit was doomed, and full of talk of betrayal.

Some of what I heard was undeniably ugly, though much of it was based on an undeniable set of facts. People were asked to make a decision, and they did. The referendum was the one meaningful political event in millions of voters’ lifetimes, and we were all assured that its result would be respected. Whatever the noise about a second referendum, this is the fundamental reason why the likelihood of Brexit interrupted remains dim.

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Our best friends.

Saudi Expels Canadian Envoy, Recalls Its Own Over ‘Interference’ (AFP)

Saudi Arabia said Monday it was expelling the Canadian ambassador and had recalled its envoy while freezing all new trade, in protest at Ottawa’s vigorous calls for the release of jailed activists. The kingdom gave the Canadian ambassador 24 hours to leave the country, in an abrupt rupture of relations over what it slammed as “interference” in its internal affairs. The move, which underscores a newly aggressive foreign policy led by Crown Prince Mohammed bin Salman, comes after Canada demanded the immediate release of human rights campaigners swept up in a new crackdown. “The Canadian position is an overt and blatant interference in the internal affairs of the kingdom of Saudi Arabia,” the Saudi foreign ministry tweeted.

“The kingdom announces that it is recalling its ambassador to Canada for consultation. We consider the Canadian ambassador to the kingdom persona non grata and order him to leave within the next 24 hours.” The ministry also announced “the freezing of all new trade and investment transactions with Canada while retaining its right to take further action”. Canada last week said it was “gravely concerned” over a new wave of arrests of women and human rights campaigners in the kingdom, including award-winning gender rights activist Samar Badawi. Samar was arrested along with fellow campaigner Nassima al-Sadah last week, the latest victims of what Human Rights Watch called an “unprecedented government crackdown on the women’s rights movement”.

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“street fighter-style deceitful drama of extortion and intimidation”.

Chinese State Media Slams Trump For ‘Extortion’ In Trade Dispute (R.)

Chinese state media on Monday lashed out at U.S. President Donald Trump’s trade policies in an unusually personal attack, even as they sought to reassure investors about the health of China’s economy as growth concerns roiled its financial markets. China’s strictly controlled news outlets have frequently rebuked the United States and the Trump administration as the trade conflict has escalated, but they have largely refrained from specifically targeting Trump.

The latest criticism from the overseas edition of the ruling Communist Party’s People’s Daily newspaper singled out Trump, saying he was starring in his own “street fighter-style deceitful drama of extortion and intimidation”. Trump’s desire for others to play along with his drama is “wishful thinking”, a commentary on the paper’s front page said, arguing that the United States had escalated trade friction with China and turned international trade into a “zero-sum game”. “Governing a country is not like doing business,” the paper said, adding that Trump’s actions imperiled the national credibility of the United States.

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So buy them new ones. But seriously, can anyone explain how Wells Fargo is still in business?

Wells Fargo Blames Computer Glitch For Customers Losing Homes (Hill)

Wells Fargo is blaming a computer glitch for more than 400 customers losing their homes between 2010 and 2015. The bank revealed in regulatory filings last week that the technological error resulted in 625 customers being denied loan modifications, and about 400 costumers having their houses foreclosed on, CNN Money reported on Friday. The filing says the bank has set aside $8 million to compensate the affected customers, it added. Wells Fargo apologized for the error and said in a statement that it is “providing remediation” to customers whose mortgages were affected, according to CNN.

The Treasury Department set up a program in 2009 to help Americans struggling to pay their mortgages, offering them the opportunity to apply for loan modifications, the network noted, adding that the computer error rejected applications from 625 Wells Fargo customers. A bank spokesperson told CNN that there is “not a clear, direct cause and effect relationship” between the error and foreclosures, but said some customers who were denied loan modifications lost their homes. Multiple government agencies are also probing Wells Fargo for its financing of low-income housing developments, Reuters reported. The embattled bank last week agreed to pay more than $2 billion to settle allegations related to offering subprime mortgages in the years before the 2008 financial crisis.

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Russia hysteria all over.

Russian Gas Is A Problem For Germany (R.)

For decades, the Friendship pipeline has delivered oil from Russia to Europe, heating German homes even in the darkest days of the Cold War. But a new pipeline that will carry gas direct from Russia under the Baltic Sea to Germany is doing rather less for friendship, driving a wedge between Germany and its allies and giving Chancellor Angela Merkel a headache. For U.S. President Donald Trump, Nord Stream 2 is a “horrific” pipeline that will increase Germany’s dependence on Russian energy. Ukraine, fighting Russian-backed separatists, fears the new pipeline will allow Moscow to cut it out of the lucrative and strategically crucial gas transit business.

It comes at an awkward time for Merkel. With the fraying of the transatlantic alliance and an assertive Russia and China, she has acknowledged that Germany must take more of a political leadership role in Europe. “The global order is under pressure,” Merkel said last month. “That’s a challenge for us … Germany’s responsibility is growing; Germany has more work to do.” In April she accepted for the first time that there were “political considerations” to Nord Stream 2, a project she had until then described as a commercial venture. Most European countries want Germany to do more to project European influence and protect eastern neighbors that are nervous of Russian encroachment.

But letting Russia sell gas to Germany while avoiding Ukraine does the opposite, depriving Kiev of transit revenues and making it, Poland and the Baltic states more vulnerable to cuts in gas supplies. “The price would be an even greater loss of trust from the Baltics, Poland and Ukraine,” said Roderich Kiesewetter, a Merkel ally on the parliamentary foreign affairs committee. “We Germans always say that holding the West together is our ‘center of gravity’, but the Russian approach has succeeded in dragging Germany, at least in terms of energy policy, out of this western solidarity.”

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Jul 262018
 


Roy Lichtenstein Forget it! Forget me! 1962

 

Trump Says Agreed With EU To Work To Lower Trade Barriers (R.)
Republicans Begin Impeachment Proceedings Against Rosenstein (ZH)
The Gray Lady Thinks Twice About Assange’s Prosecution (McGovern)
Facebook Stock Drops 24%, $132 Billion In Lost Market Value (MW)
China Pulls Approval For Facebook’s Planned Venture (R.)
This Stock Market Isn’t As Strong As You Think – Rosenberg (CNBC)
US Household Wealth Is In A Bubble – Part 2 (Colombo)
Prepare for a Chinese Maxi-Devaluation (Rickards)
A Weak US Dollar Will Not Make America Great (Lacalle)
Britain Is Hoarding Food, Medicines And Blood In Case Of No-Deal Brexit (Ind.)
There Is No Majority In UK Parliament For Any Brexit Deal (Ind.)
US Lawmaker Pranked By Sacha Baron Cohen To Resign (AFP)
Gene-Edited Plants And Animals Are GMO Foods – EU Top Court (G.)

 

 

What a good glass of wine can accomplish.

Trump Says Agreed With EU To Work To Lower Trade Barriers (R.)

U.S. President Donald Trump said on Wednesday the United States and the European Union were kicking off talks aimed at lowering trade barriers as officials looked to head off a brewing trade war. “This was a very big day for free and fair trade, a very big day indeed,” Trump told reporters at the White House after meeting with European Commission President Jean-Claude Juncker. “We are starting the negotiation right now but we know very much where it’s going,” Trump said. Speaking with Juncker at his side, Trump said they had agreed in talks to “work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans; soybeans is a big deal,” he said, adding that Europe would also step up purchases of liquefied natural gas from the United States. “They are going to be a massive buyer of LNG,” Trump said. Trump said the talks would “resolve” both the hefty tariffs the United States had placed on imports of steel and aluminum from the EU and the tariffs Europe had slapped on U.S. goods in response. It was not clear whether the two sides made any progress on the contentious issue of possible U.S. tariffs on imports of automobiles from Europe. But Juncker said they had agreed not to impose any new tariffs while talks were taking place.

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More to fight over.

Republicans Begin Impeachment Proceedings Against Rosenstein (ZH)

House GOP members led by Freedom Caucus Chairman Mark Meadows (NC) have filed formal articles of impeachment against Deputy Attorney General Rod Rosenstein, according to a late Wednesday announcement by Meadows over Twitter. News of the resolution comes after weeks of frustration by Congressional investigators, who have repeatedly accused Rosenstein and the DOJ of “slow walking” documents related to their investigations. Lawmakers say they’ve been given the runaround – while Rosenstein and the rest of the DOJ have maintained that handing over vital documents would compromise ongoing investigations. Not even last week’s heavily redacted release of the FBI’s FISA surveillance application on former Trump campaign Carter Page was enough to dissuade the GOP lawmakers from their efforts to impeach Rosenstein.

In fact, its release may have sealed Rosenstein’s fate after it was revealed that the FISA application and subsequent renewals – at least one of which Rosenstein signed off on, relied heavily on the salacious and largely unproven Steele dossier. In late June, Rosenstein along with FBI Director Christopher Wray clashed with House Republicans during a fiery hearing over an internal DOJ report criticizing the FBI’s handling of the Hillary Clinton email investigation by special agents who harbored extreme animus towards Donald Trump while expressing support for Clinton. Republicans on the panel grilled a defiant Rosenstein on the Trump-Russia investigation which has yet to prove any collusion between the Trump campaign and the Kremlin. “This country is being hurt by it. We are being divided,” Rep. Trey Gowdy (R-SC) said of Mueller’s investigation. “Whatever you got,” Gowdy added, “Finish it the hell up because this country is being torn apart.”

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Waking up?

The Gray Lady Thinks Twice About Assange’s Prosecution (McGovern)

Well, lordy be. A lawyer for The New York Times has figured out that prosecuting WikiLeaks publisher Julian Assange might gore the ox of The Gray Lady herself. The Times’s deputy general counsel, David McCraw, told a group of judges on the West Coast on Tuesday that such prosecution would be a gut punch to free speech, according to Maria Dinzeo, writing for the Courthouse News Service. Curiously, as of this writing, McCraw’s words have found no mention in the Times itself. In recent years, the newspaper has shown a marked proclivity to avoid printing anything that might risk its front row seat at the government trough.

Stating the obvious, McCraw noted that the “prosecution of him [Assange] would be a very, very bad precedent for publishers … he’s sort of in a classic publisher’s position and I think the law would have a very hard time drawing a distinction between The New York Times and WikiLeaks.” That’s because, for one thing, the Times itself published many stories based on classified information revealed by WikiLeaks and other sources. The paper decisively turned against Assange once WikiLeaks published the DNC and Podesta emails. More broadly, no journalist in America since John Peter Zenger in Colonial days has been indicted or imprisoned for their work.

Unless American prosecutors could prove that Assange personally took part in the theft of classified material or someone’s emails, rather than just receiving and publishing them, prosecuting him merely for his publications would be a first since the British Governor General of New York, William Cosby, imprisoned Zenger in 1734 for ten months for printing articles critical of Cosby. Zenger was acquitted by a jury because what he had printed was proven to be factual—a claim WikiLeaks can also make. McCraw went on to emphasize that, “Assange should be afforded the same protections as a traditional journalist.”

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Talk about waking up.

Facebook Stock Drops 24%, $132 Billion In Lost Market Value (MW)

Facebook Inc. is evidently not bulletproof. The social-media behemoth’s stock lost roughly one-fifth of its value in the extended session Wednesday after its earnings report missed expectations on revenue and showed slowing user growth. Weak guidance also rattled investors. Facebook stock dropped about 7% immediately after the earnings report was released, then plummeted to a loss of more than 20% as a conference call with analysts progressed. Close to 34 million shares changed hands in the extended session, well above the average volume of 17 million shares for a regular trading session over the past month. Should the losses hold into Thursday’s regular session, Facebook would lose more than $100 billion in market capitalization and lose the stock’s gains for the year thus far.

As the after-hours session wrapped up, Facebook was trading at $173.50, down 20%. Facebook stock had recovered from a decline earlier this year in the wake of the Cambridge Analytica scandal, one of several controversies and warning signs that the company had managed to weather with little damage to its stock. But declining revenue and user growth, topped by a warning from executives that it will continue, seemed to end that run. “The guidance, it’s nightmare guidance,” GBH Insights head of technology research Daniel Ives said. “If you look at their forecast for the second half of the year in terms of user growth, and the expense profile, it refuels the fundamental worries about Facebook post-Cambridge Analytica.”

Read more …

Why would Facebook want to be in China? To help Beijing spy?

China Pulls Approval For Facebook’s Planned Venture (R.)

China has withdrawn its approval for Facebook Inc’s plan to open a new venture in the eastern province of Zhejiang, the New York Times reported on Wednesday, citing a person familiar with the matter. A Chinese government database showed that Facebook had gained approval to open a subsidiary, but the registration has since disappeared, according to checks made by Reuters. The move is a setback for Facebook, which has been struggling to gain a foothold in China, the most populous country in the world, where its website and messaging app Whatsapp remain blocked.

The incident also illustrates how difficult it can be for a U.S. company to navigate the government bureaucracy in a country where so many technology firms have tried and failed. “Terms like ‘The Great Firewall’” often gives outsiders the impression that the Chinese government is totally united on technology policy,” said Matt Sheehan, an expert on China-California relations and fellow at The Paulson Institute think tank. “In reality, within that Firewall are lots of competing fiefdoms and ongoing turf wars.” China’s decision comes amid escalating tensions with the United States after the world’s two largest economies imposed tariffs on each other’s imports.

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It’s just 6 stocks.

This Stock Market Isn’t As Strong As You Think – Rosenberg (CNBC)

Don’t be fooled. This market is weaker than it seems, according to David Rosenberg, chief economist and strategist at Gluskin Sheff. The S&P 500 is up more than 5% in 2018, recovering from a correction earlier in the year. The broad index was also just 1.9% removed from an all-time high reached in late January as of Tuesday’s close. However, Rosenberg notes that while momentum stocks are lifting the market, “many subsectors are well off their highs: Homebuilders. Autos. Banks. Insurance. Consumer products. Telecom. Media. Transports. Utilities. Pharma. And many more.” The S&P automobiles and components industry group is nearly 20% below its 52-week high, while insurance stocks are down 10.8% from their one-year high. The Dow transports index, meanwhile, is 6.5% below its one-year high.

“What has kept the market near record terrain are a mere six stocks — Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook,” Rosenberg said in a note to clients Wednesday. “Strip out these six flashy stocks, and the overall market has done practically nothing year-to-date.” Through mid-July, Alphabet, Apple, Amazon, Netflix, Microsoft and Facebook had contributed nearly 80% to the S&P 500’s gains. These six names have been on fire this year. Netflix and Amazon are up 86% and 57% in 2018, respectively. Microsoft and Facebook have both risen more than 20% while Alphabet and Apple have jumped 19.8% and 14%, respectively. Rosenberg said such concentration in the stock market has not been seen since the late 1990s, just before the dot-com bubble burst. “We know from history how these cycles typically end.”

Read more …

Jesse! So many graphs!

US Household Wealth Is In A Bubble – Part 2 (Colombo)

While above-average corporate profitability may sound like a good thing when taken at face value, I view it as another worrisome sign because it’s further evidence of an economy and financial markets that are being juiced by cheap credit and financial engineering. Ultra-low interest rates help to boost corporate profitability by reducing borrowing costs. Cheap credit also gives consumer spending a strong boost, which has a significant effect on our economy that is heavily driven by consumer spending. Low interest rate environments allow the government (federal, state, and local) to borrow more cheaply in the bond market and use it to boost spending, which gives the overall economy a shot in the arm. In addition, artificially-inflated financial markets boost the profitability of the financial sector.

A major risk for the stock market is the mean reversion of corporate profitability, which is a nightmarish prospect when considering how overpriced stocks currently are relative to earnings. This mean reversion is likely to occur as the result of the ending of ultra-cheap credit conditions (when corporate bonds fall back to earth) and through increased competition, which is what Milton Friedman warned about. (Note: critics may try to rebut my assertions by claiming that U.S. corporate profitability is unusually high due to corporations earning a higher percentage of earnings overseas. I’ve accounted for this by using gross national product as the denominator instead of the more commonly used GDP.)

What is particularly alarming about the current U.S. stock market bubble is the fact that it’s driven by a very narrow group of stocks, which means that there isn’t a healthy breadth, or broad strength, behind the bull market. In general, tech stocks have been leading the way – in particular, a group of stocks known as FAANG, which is an acronym for Facebook, Apple, Amazon, Netflix, and Google. The chart below compares the performance of the FAANG stocks to the S&P 500 during the bull market that began in March 2009. While the S&P 500 is up approximately 300%, the FAANGs are up significantly more, with Apple rising by over 1,000%, Amazon rising more than 2,000%, and Netflix surging by over 6,000%.

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Xi is cornered.

Prepare for a Chinese Maxi-Devaluation (Rickards)

If Trump imposes 25% tariffs on Chinese goods, China could simply devalue their currency by 25%. That would make Chinese goods cheaper for U.S. buyers by the same amount as the tariff. The net effect on price would be unchanged and Americans could keep buying Chinese goods at the same price in dollars. The impact of such a massive devaluation would not be limited to the trade war. A cheaper yuan exports deflation from China to the U.S. and makes it harder for the Fed to meet its inflation target. Also, the last two times China tried to devalue its currency, August 2015 and December 2015, U.S. stock markets crashed by over 11% in a matter of a few weeks.

So, if the trade war escalates as I expect, don’t worry about China dumping Treasuries or imposing tariffs. Watch the currency. That’s where China will strike back. When they do, U.S. stock markets will be the first victims. Maybe you think that’s unlikely because it would be such an extreme reaction by China. But you have to put yourself in the shoes of China’s leadership. These aren’t academic issues to China’s leaders. They go to the heart of the government’s very legitimacy. China’s economy is not just about providing jobs, goods and services. It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. The overriding imperative of the Chinese leadership is to avoid societal unrest.

If China encounters a financial crisis, Xi could quickly lose what the Chinese call, “The Mandate of Heaven.” That’s a term that describes the intangible goodwill and popular support needed by emperors to rule China for the past 3,000 years. If The Mandate of Heaven is lost, a ruler can fall quickly. Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused. Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste.

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The US is not export-driven.

A Weak US Dollar Will Not Make America Great (Lacalle)

The US dollar has become the safest asset in the face of mounting evidence that the “beggar thy neighbor” policy and drowning structural problems in liquidity is coming to a close. The reality is that the US dollar is strengthening because of the evidence of a deeper slowdown in China and the massive imbalances built by some emerging economies in the past -large fiscal and trade deficits financed with the cheap inflow of dollars-. As the US economy improves and others face the saturation of past stimuli, it is only logical that the United States sees a high inflow of funds from abroad. And that is good. Keeps US treasury yields low, a high demand for bonds and equities, and a steady increase in capital investment into the US economy.

There are many who think that the US economy will not accept a strong dollar. Allow me to doubt it. The US only exports around 10% of GDP and less than 30% of the profits of the S & P 500 come from exports. In the past nine years, devaluing and lowering rates has hurt the middle class, savers, workers, and high productivity companies. Those that voted for the current administration to make a drastic change on the past mistakes. A devaluation policy hurts more Americans than it helps. Devaluation is simply stealing from your citizens’ savings and disposable income. A strong US dollar reduces inflationary pressures and keeps interest rates low. Both effects are positive for savers, workers, and families as the economy strengthens and wages improve.

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Keep calm and….

Britain Is Hoarding Food, Medicines And Blood In Case Of No-Deal Brexit (Ind.)

Theresa May has urged voters not to worry about Brexit, despite her government setting out plans to stockpile food, blood and medicine in case it goes badly. She said people should take “reassurance and comfort” from news of the plans, to be implemented if the UK crashes out of the EU without an agreement in March next year. The scenario is looking increasingly likely given deep divisions in the Conservatives over Ms May’s approach, her wafer thin commons majority and the EU’s on-going resistance to what the prime minister is proposing. It comes as The Independent launched a campaign to give the British people a Final Say in a referendum on whatever is proposed at the end of Brexit negotiations, with thousands flocking to sign a petition supporting the cause.

Ireland’s deputy prime minister accused the PM of “bravado” in talking up the dangers of a no-deal Brexit, while Tory insiders claim the PM is doing so to warn her rebellious MPs of the consequence of failing to back her unpopular Brexit plans. Ms May confirmed in a TV interview that plans for stocking up on essential goods are underway, in case imports from the EU are cut off by clogged ports or regulatory disputes. But, asked if it was “alarming” for people, the prime minister told Channel 5: “Far from being worried about preparations that we are making, I would say that people should take reassurance and comfort from the fact that the government is saying we are in a negotiation, we are working for a good deal. “I believe we can get a good deal, but, it’s right that we say – because we don’t know what the outcome is going to be – let’s prepare for every eventuality.”

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Inevitable: a general election, a leadership challenge or a people’s vote.

There Is No Majority In UK Parliament For Any Brexit Deal (Ind.)

Imagine you’re back at school and you can’t be bothered to do any work for the most important exams of your entire academic career. Alarmed by your indifference, your parents ask what you propose to do. Imagine how they would react if you told them you were thinking of having an extended summer holiday, to put off the moment of reckoning for as long as possible. Quite frankly, this is where our government now is in the Brexit negotiations. A longer than usual summer recess seems to be the best these great minds can come up with. The problem is we are not in school, Brexit is not homework and the bullies will do more than give us a bloody nose.

The EU is like the strict exam board of governors and appears to have no time for excuses or interest in making Theresa May’s sloppy government look good. It is a measure of May’s desperation that she said in Belfast last week that the EU was trying to achieve an “economic and constitutional dislocation” of our country. That kind of talk may play well with the hard-right Brexiteers who are too painfully holding her and her government hostage, but it doesn’t impress Brussels. May needs to realise that we can all see she is now merely playing for time and there are only a finite number of options open to her: a general election, a leadership challenge or a people’s vote.

[..] The plain truth is that there is no majority in parliament for any deal. The EU thinks the prime minister’s Chequers plan is too favourable to the UK, and the Brexiteers think it’s too favourable to Brussels. A Norway deal would mean accepting free movement and paying large amounts to Brussels; a Canada-style deal means the prospect of a hard border returning to the line on the map that separates Eire and Northern Ireland. Viewed through the lens of May’s parliamentary party, there is no consensus, no coming together on any of these options. Brexit is collapsing under the weight of its own contradictions.

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“he exposed himself and shouted racial slurs..”

US Lawmaker Pranked By Sacha Baron Cohen To Resign (AFP)

A US state lawmaker is resigning after a humiliating appearance on comedian Sacha Baron Cohen’s television show during which he exposed himself and shouted racial slurs. Jason Spencer, a Republican member of the Georgia House of Representatives, had been under pressure from his own party to step down following the embarrassing appearance on Cohen’s series “Who Is America?” Spencer, 43, finally announced on Wednesday that he planned to resign on July 31. He had already lost a primary in May but he could have remained in office until November. Spencer was one of several Republican figures pranked by Cohen on the Showtime series.

Others included former vice president Dick Cheney, who signed a “waterboarding kit” and former Republican vice presidential nominee Sarah Palin. In the episode of “Who Is America” with Spencer, Cohen pretends to be an Israeli anti-terrorism expert, Colonel Erran Morad, offering self-defense training. At one point, Spencer is persuaded to expose his buttocks and chase Cohen while yelling “USA” and racial slurs. Spencer, in a statement this week to The Washington Post, said Cohen “took advantage of my paralyzing fear that my family would be attacked.” Spencer told the Post he had received death threats after introducing a bill that would ban Muslim women from publicly wearing burqas. Palin, the former governor of Alaska, denounced the show as “evil, exploitive, sick ‘humor.'”

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This has been a 10-year debate.

Gene-Edited Plants And Animals Are GMO Foods – EU Top Court (G.)

Plants and animals created by innovative gene-editing technology have been genetically modified and should be regulated as such, the EU’s top court has ruled. The landmark decision ends 10 years of debate in Europe about what is – and is not – a GM food, with a victory for environmentalists, and a bitter blow to Europe’s biotech industry. It also marks a setback for UK scientists who took advantage of a legal grey area to of gene edited camelina crops, augmented with Omega-3 fish oils. Greenpeace said that the ruling meant the British government – along with Belgium, Sweden and Finland – was now obliged to “revoke” the green light for the trials until appropriate precautions had been taken.

In their ruling, the EU judges said: “Organisms obtained by mutagenesis are GMOs [genetically modified organisms] … It follows that those organisms come, in principle, within the scope of the GMO directive and are subject to the obligations laid down [therein].” The court sided with the French agricultural trades union, Confédération Paysanne, which brought the case, arguing that new and unconventional in vitro mutagenesis techniques were likely to be used to produce herbicide-resistant plants, with potential health risks. A study published in the journal Nature last week found that the gene-editing technology Crispr-Cas9 can cause significantly greater genetic distortions than expected, with potential “pathogenic consequences”. Gene editing alters the genomes of a living species by slicing genome strands in a bid to remove undesirable traits, without inserting foreign DNA.

Read more …

Jun 092018
 


Dorothea Lange Children and home of cotton workers at migratory camp in southern San Joaquin Valley, CA 1936

 

My long time pal Jesse Colombo, now at Real Investment Advice, recently linked on Twitter to a Zero Hedge article, which quoted CoreLogic as saying more than half of American homes are overvalued. CoreLogic calls itself “a leading provider of consumer, financial and property data, analytics and services to business and government.”

Well, CoreLogic is way off. All American homes are overvalued. How can we tell? It’s easy. It’s so easy it’s perhaps no wonder that people overlook the reasons why. But we all know them: The Fed has pushed some $20 trillion down the throats of the financial system. It has also lowered interest rates to near zero Kelvin. Then the government added a “relaxation” of lending standards and an upward tweak of credit scores. And Bob’s your uncle.

These measures haven’t influenced just half of US homes, they’ve hit every single one of them. Some more than others, not every bubble is as big as San Francisco’s, but the suggestion that nearly half of homes are not overvalued is simply misleading. It falsely suggests that if you buy a home in the ‘right’ place, you’ll be fine. You won’t be. The Washington-induced bubble will and must pop, and precious few homes will be ‘worth’ what they are ‘worth’ today.

Here’s what Jesse tweeted along with his link to the Zero Hedge article:

“Almost half of the US housing market is overvalued” – this is why U.S. household wealth is also overvalued/in an unsustainable bubble.

He followed up with:

U.S. household wealth is in a bubble thanks to Fed-inflated asset prices. This is creating a “wealth effect” that is helping to drive our spurious economic recovery. This economy is nothing but a sham. It’s smoke and mirrors. Wake the F up, everyone!!!

My reaction to this:

Sorry, my friend Jesse, but every single US home is overvalued. It just depends on the vantage point you look from. All prices have been distorted by the Fed’s policies, not just half of them. Arguably some more than others, but can that be the core argument here?

Jesse’s reply:

Yes, that’s a good point.

Another long time pal, Dave Collum, chimed in with a good observation:

I think even us bunker monkeys start recalibrating, no matter how hard we try to maintain what we believe to be perspective.

Yes, we’ve been at this for a while. Even if Jesse was still a student when he started out. We’ve been doing it so long that he recently wrote an article named: Why It’s Right To Warn About A Bubble For 10 Years. And he’s right on that too.

Let’s get to the article the conversation started with:

 

More Than Half Of American Homes Are Overvalued, CoreLogic Warns

CoreLogic reports that residential real estate prices nationwide increased 6.9% year over year from April 2017 to April 2018. The firm’s Home Price Index (HPI) also shows a 1.2% rise on the month-over-month basis from March to April 2018. This has certainly sparked the debate of housing affordability across the nation with many millennials struggling to achieve the American dream.

CoreLogic Market Condition Indicators showed that 40% of the 100 largest metropolitan areas were overvalued in April, compared to 28% undervalued, and 32% in line with valuations. The report uncovers a shocking discovery that of the nation’s top 50 largest residential real estate markets, 52% were overvalued in April.

CoreLogic’s methodology behind overvalued housing markets “as one in which home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.”

The CoreLogic people probably mean well, but they also probably don’t want to rattle the cage. It’s not really important. As soon as someone starts talking about a ‘sustainable level’ for home prices, you can tune out. Because no such thing exists. Unless you first take those $20 trillion out of the ‘market’, free up interest rates, tighten lending standards and lower credit scores. Only then MAY you find a ‘sustainable level’ for prices.

Historically a house in the US cost around 3 to 4 times the median annual income. During the housing bubble of 2007 the ratio surpassed 5 – in other words, the median price for a single-family home in the United States cost more than 5 times the US median annual household income. According to Mike Maloney, this ratio is heavily influenced by interest rates. When interest rates go down the affordability of a house goes up, so people spend more money on a house. Interest rates have now been falling since 1981 when they peaked at 15.32% (for a 10-year US treasury bond).

Mike Maloney, another longtime friend of the Automatic Earth, is dead on. Price to income is a useless point unless you include interest rates in the calculation. And then you can get large differences. Since interest rates have been falling for 37 years, count on them to rise. And see what that does to your model.

“The best antidote for rising home prices is additional supply,” said Dr. Frank Nothaft, chief economist for CoreLogic. “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures,” Nothaft added.

Right, yeah. Now we know the CoreLogic mindset. The more you build, the better home prices will be. Just one of many problems with that is that if you really expect prices to fall once you build, people will build fewer houses, because profit margins fall too. The whole idea that we can save housing markets by simply building ever more has never rung very true. But that’s for another day.

In a recent op-ed piece via The Wall Street Journal, Paul Kupiec and Edward Pinto place the blame on the government for creating another real estate bubble through “loose mortgage terms pushing home prices up.” They claim that mortgage underwriters need to tighten standards.

“Home prices are booming. So far, 2018 has posted the strongest growth since 2005. “About 60% of all U.S. metros saw an acceleration in the rate of price increases through February this year,” according to Housing Wire. Since mid-2012, real home prices have increased 28%, according to data from the American Enterprise Institute. Entry-level home prices are up about double that rate. In contrast, over the same period household income has barely kept pace with inflation. The current pace of home-price inflation is increasing the risk of another housing bubble.

The Fed is raising rates -finally- and home prices grow at the fastest rate in 13 years. Over the past 6 years prices are up 28%. Entry level homes are up more than 50% in that time frame. That is just profoundly scary. It’s like Dante’s descent into hell. And no, it’s not true that “The current pace of home-price inflation is increasing the risk of another housing bubble”. We’re already caught up head first in a new housing bubble.

“The root of the problem is declining underwriting standards. In April Freddie Mac announced an expansion of its 3% down-payment mortgage, the better to compete with the Federal Housing Administration and Fannie Mae . Such moves propel home prices upward. Because government agencies guarantee about 80% of all home-purchase mortgages, their underwriting standards guide the market.

Making lending even more dangerous, CNBC recently reported that “credit scores may go up” because new regulatory guidance allows delinquent taxes to be excluded when calculating credit scores. These are only some of the measures that “expand the credit box” and qualify ever-shakier borrowers for mortgages.”

As I said before: if you lower lending -and underwriting- standards and artificially raise credit scores, then yes, you can keep the bubble going for a while longer. But it overvalues properties. You’re just moving goalposts.

“During the last crisis, easy credit led home prices to rise at an unsustainable pace, leading marginally qualified borrowers to stretch themselves thin. Millions of Americans’ dreams became nightmares when the housing market turned. The lax underwriting terms that helped borrowers qualify for a mortgage haunted many households for the next decade.”

No, it’s not just homes. Stocks and bonds as just as overvalued. Because of a behemoth attempt at making the economy look good, even though it’s entirely fake. No price discovery, no market, just central banks and tweaking standards and surveys. C’mon, we all know where this must go. We just don’t want to know. So this Marketwatch piece gets a wry smile at best:

 

America Is House-Rich But Cash-Poor

The housing market has not only recovered from the Great Recession, it’s heated up. According to an analysis from Attom Data, nearly 14 million Americans are now “equity rich” – meaning they have at least 50% equity in their homes. It bears repeating that many owners and communities are not so lucky: over a million Americans are underwater, and some cities and towns are still reeling under the weight of abandoned and vacant homes and stagnant micro-economies. But for most of the country, rapidly rising home prices and a dearth of anything else to buy means people are staying in their homes longer, allowing them to accrue more and more equity: $15 trillion worth, to be exact.

 

 

Jun 052018
 


John French Sloan East Entrance, City Hall, Philadelphia 1901

 

Carbon Bubble To Destroy Trillions Of Dollars Of Global Wealth (Ind.)
The Effects Of Trump’s Steel Tariffs On Red State Energy (F.)
US Firms To Pour $2.5 Trillion Into Buybacks, Dividends, M&A This Year (CNBC)
India Central Banker Sees Sudden “Evaporation” Of Dollar Funding (ZH)
China’s Debt Crackdown To Hurt Emerging Markets, Oil, Metals – Fitch (R.)
Italy’s Long, Hot Summer (Carmen Reinhart)
Why The Euro Was Created (ZH)
Toronto’s House Price Bubble Not Fun Anymore (WS)
Why Australia’s Great Banking Boom Has Ended (SMH)
Apple Jams Facebook’s Web-Tracking Tools (BBC)
A West Coast State of Mind (Jim Kunstler)
Edward Snowden: ‘The People Are Still Powerless, But Now They’re Aware’ (G.)
Who Should Feed The World: Real People Or Faceless Multinationals? (Vidal)

 

 

Don’t think it will happen without an overall economic collapse.

Carbon Bubble To Destroy Trillions Of Dollars Of Global Wealth (Ind.)

Trillions of dollars of fossil fuel wealth will be wiped out at some point over the next 17 years even if governments fail to impose binding carbon emissions limits on industry to curb global warming, according to a major new study. Environmentalists and policymakers have long warned of the threat of a “carbon bubble” and “stranded assets” for listed energy companies, based on the possibility they will never be able to realise the value of their vast stores of oil, gas and coal if politicians actually deliver on their decarbonisation promises.

But today a group of scientists and analysts from Cambridge, Nijmegen, Macao and the Open University take that warning a step further by arguing that these assets are destined to be stranded regardless of official policies to discourage the use of fossil fuels because clean energy technologies are now developing so rapidly that those polluting assets will be worthless in any case. “Our analysis suggests that, contrary to investor expectations, the stranding of fossil fuels assets may happen even without new climate policies. This suggests a carbon bubble is forming and it is likely to burst,” said Professor Jorge Viñuales from Cambridge University. If policymakers did deliver on the decarbonisation programmes, the loss for investors would be even more rapid.

The research is at odds with work from the International Energy Agency, which projects steady price rises for fossil fuels until 2040. And Donald Trump’s decision last year to pull the United States out of the Paris Agreement on climate change has also done nothing to persuade most investors to take the stranded assets warning seriously. But the researchers’ new “simulation-based, energy-economy-carbon-cycle climate” model suggests investing in fossil fuel firms today is likely to prove a disastrous bet, suggesting that between $1 trillion and $4 trillion could be wiped off the value of global fossil fuel assets by 2035.

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Steel and concrete prices better not rise.

The Effects Of Trump’s Steel Tariffs On Red State Energy (F.)

Electricity production is heavily dependent on materials like steel, concrete, copper and aluminum, for both producing electricity and moving it around to where it’s needed (see figure). Solar and Wind energy take more steel than any other energy source. Natural gas and nuclear take the least. Solar needs 1,600 tons of steel per MW, wind energy needs over 400 tons of steel, while gas and nuclear need only 4 and 40 tons, respectively. Wind and solar also require ten times more transmission, also heavily steel-intensive, since they are usually sited far away from where the energy is used.

The average high-voltage transmission tower includes about 30 tons of steel and transmission wire contains about a ton of steel per mile. Going from our biggest solar array, located in the Mohave Desert, to Los Angeles is almost 300 miles, requiring on the order of 10,000 tons of steel depending on specific design. While we tend to think of renewables as associated with Blue States, they are actually growing faster in Red States. Four of the five states with the most installed wind energy are Texas (20,321 MW), Iowa (6,917 MW), Oklahoma (6,645 MW) and Kansas (4,451 MW). The only Blue State in the top five is California (5,662 MW).

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Prop up your stock some more.

US Firms To Pour $2.5 Trillion Into Buybacks, Dividends, M&A This Year (CNBC)

Money is pouring into the U.S. economy and in turn helping provide support for the otherwise struggling stock market. If current conditions persist, corporations are likely this year to inject more than $2.5 trillion into what UBS strategists term “flow” — the combination of share buybacks, dividends, and mergers and acquisitions activity. The development comes as companies find themselves awash in cash, thanks primarily to years of stashing away profits plus the benefits of a $1.5 trillion tax break this year that slashed corporate rates and encouraged firms to bring back money idling overseas. Companies have nearly $2.5 trillion in cash parked domestically, according to the Federal Reserve, and as much as $3.5 trillion overseas, various estimates have shown.

When all is said and done for 2018, UBS expects dividend issuance to top $500 billion, buybacks to range from $700 billion to $800 billion, and M&A to constitute about $1.3 trillion. If the numbers pan out, they would equate to about 10% of the S&P 500’s market cap and 12.5% of GDP. “Assuming improving growth and stable rates, we expect the positive positioning/flow backdrop to support US equities, which is important as the daily corporate flow slows from mid-June to mid-July,” UBS strategist Keith Parker said in a note. Parker pointed out that the firm has overweight positions in both tech and health care as the two sectors are leading the buyback boom.

Buybacks specifically have been on a torrid pace and are helping provide a floor to a market that for much of 2018 had looked tired and volatile after a 20% S&P 500 gain the year before. Repurchases are up 83% year to date, far ahead of the 9% gain in dividends, while M&A activity involving U.S. companies has surged 130%, according to UBS. [..] UBS estimates that the combination of buybacks, dividends and demand flows account for some 40% in performance this year. The S&P 500 has nudged 2.6% higher and the Dow industrials are just ahead of breakeven.

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The Fed retreats and the Treasury issues new debt.

India Central Banker Sees Sudden “Evaporation” Of Dollar Funding (ZH)

In an op-ed published overnight in the FT, a central banker writes that when it comes to the turmoil gripping the world’s Emerging Markets, whether it is the acute, idiosyncratic version observed in Argentina and Turkey, which according to JPM may be doomed, or the more gradual selloffs observed in places like Indonesia, Malaysia, Brazil, Mexico and India, don’t blame the Fed’s rate hike cycle. Instead blame the “double whammy” of the Fed’s shrinking balance sheet coupled with the dollar draining surge in debt issuance by the US Treasury.

That’s the message from the current Reserve Bank of India, Urjit Patel, who writes that “unlike previous turbulence, this episode cannot be attributed to the US Federal Reserve’s moves on interest rates, which have been rising steadily since December 2016 in a calibrated manner.” But does that mean that the Fed is not to blame for what increasingly looks like another budding EM crisis? Not at all: according to Patel, the dollar funding shortage “upheaval” stems from what he sees as the confluence of two significant events of which the Fed’s balance sheet reduction is one, while the second is the dramatic increase in US Treasury issuance to pay for Trump’s tax cuts; what is notable is that both events are drastically soaking up dollar liquidity.

As a result, Patel blames a lack a coordination between the Fed and Treasury on the adverse flow through across global funding markets as a result of this decline in dollar liquidity, and writes that “given the rapid rise in the size of the US deficit, the Fed must respond by slowing plans to shrink its balance sheet. If it does not, Treasuries will absorb such a large share of dollar liquidity that a crisis in the rest of the dollar bond markets is inevitable.” Putting these two parallel processes – which threaten to materially impair dollar funding markets – in context, on one hand there is QT, or the gradual decline in the Fed’s balance sheet which is set to peak at a rate of $50BN/month by October, while at the same time US net Treasury issuance is set to jump to $1.2 trillion in 2018 and 2019 to cover the forecasted budget deficit of $804BN and $981BN in 2018 and 2019, respectively.

And in a curious coincidence, the withdrawal of dollar funding by the Fed in monthly terms, as it reduces its reinvestment of income received, is proceeding at roughly the same pace as that of net issuance of debt by the US government. Furthermore, both processes are open ended which means that over the next few years, the government’s net issuance will stabilize, albeit at a high level, whereas the Fed’s balance-sheet reduction will keep rising. Both are terrible news for Emerging Markets, which are in desperate need of reversing the ongoing dollar outflows; however as long as Trump continues to make America great, and funds said stimulus with excess debt issuance, emerging market turmoil is virtually guaranteed.

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China retreats, too.

China’s Debt Crackdown To Hurt Emerging Markets, Oil, Metals – Fitch (R.)

China’s debt crackdown is a key risk to the country’s economic growth and will have significant knock-on effects for the global economy, particularly emerging markets with high commodity dependence or close Chinese trade links, Fitch Ratings said. Beijing’s campaign to put a lid on debt could also lead to a sharp slowdown in business investment, Fitch said late on Sunday, forecasting that growth in the world’s second-biggest economy would slow to around 4.5% over the medium term. Fitch said the implications of this scenario for the global economy would be significant but not dramatic, unlike a full-scale hard landing.

One of the most significant effects would be on commodity prices, with Fitch expecting oil and metal prices to fall 5 to 10% from its baseline scenario, reflecting China’s large role as a commodity consumer. In April, a Reuters poll of 72 institutions showed economists expected China’s economic growth to slow to 6.5% this year and 6.3% next year as Beijing extends its crackdown on riskier lending practices. GDP in 2017 expanded 6.9% in real terms and 11.2% in nominal terms. Beijing’s financial crackdown, now in its third year, has slowly pushed up borrowing costs and is choking off alternative, murkier funding sources for companies such as shadow banking.

The ratio of Chinese corporate debt to GDP is already very high by international standards – at 168% in 2017 – and is expected to start rising again as nominal GDP growth declines towards 8% from the unusually high rate of more than 11% in 2017, Fitch said. If the government aims to stabilize its corporate debt ratio by 2022, Fitch said China’s nominal economic growth rate could fall by 1 percentage point a year over the medium term while business investment growth would drop 5percentage points per year.

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Restructuring Target2. That should be fun.

Italy’s Long, Hot Summer (Carmen Reinhart)

The political upheaval and social unrest fueling the current crisis in Italy should surprise no one. On the contrary, the only uncertainty was when exactly matters would come to a head. Now they have. Italy’s per capita GDP in 2018 is about 8% below its level in 2007, the year before the global financial crisis triggered the Great Recession. And the International Monetary Fund’s projections for 2023 suggest that Italy will still not have fully recovered from the cumulative output losses of the past decade. Among the 11 advanced economies that were hit by severe financial crises in 2007-2009, only Greece has suffered a deeper and more protracted economic depression.

Greece and Italy were the two economies carrying the highest debt burdens at the outset of the crisis (109% and 102% of GDP, respectively), leaving them poorly positioned to cope with major adverse shocks. Since the crisis erupted a decade ago, economic stagnation and costly banking weaknesses have propelled debt burdens higher still, despite a decade of exceptionally low interest rates. Greece has already faced more than one “credit event” and, while Italy has also had a couple of close calls, the spring of 2018 is turning out to be its most tumultuous episode yet. The summer will probably be worse, bringing Italy closer to a sovereign debt crisis. On the surface, general government debt appears to have stabilized since 2013, at around 130% of GDP. However, as I have stressed here and elsewhere, this “stability” is misleading.

General government debt is not the whole story for Italy, even setting aside the private debt loads and the recent renewed upturn in nonperforming bank loans (a daunting legacy of the financial crisis). When evaluating Italy’s sovereign risk, the central bank’s debts (Target2 balances) must be added to those of the general government. As the most recent available data (through March) show, these balances increase the ratio of public-sector debt to GDP by 26%. With many investors pulling out of Italian assets, capital flight in the more recent data is bound to show up as an even bigger Target2 hole. This debt, unlike pre-1999, pre-euro Italian debt, cannot be inflated away. In this regard, it is much like emerging markets’ dollar-denominated debts: it is either repaid or restructured.

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What the euro has meant for Greece and Italy: lower wages, higher unemployment and higher current account deficit.

Why The Euro Was Created (ZH)

[..] we thought it would be a good idea to remind readers why the euro exists in the first place. The briefest possible answer: to make sure the Deutsche Mark does not. As presented in the chart below – which shows the performance for each of the EU12 countries against the German DEM in every decade from the 1950s to the start of the Euro in 1999 – apart from a small revaluation of core countries in the 1990s, every country devalued to Germany in every decade between the 1950s and the start of the Euro. Said otherwise, the Deutsche Mark appreciated in value against all of its European peers for 5 consecutive decades, a condition which if left unchanged, would have led to an economic and trade crisis.

And as a bonus chart, here is same data (with the US and UK added) from the end of the Bretton Woods system in 1971 to the start of the Euro (Lira -82% devaluation to German DM) and during the 1990s (-24% devaluation) – the decade immediately leading up to the Euro start. As can be seen Italy is amongs the weakest performers relative to the German DM over these periods and showed the momentum that existed in the period leading up to the start of the Euro.

And while the fixed exchange of the Euro for European nations allowed the German export industry to go into overdrive, the lack of the possibility for an external, i.e. currency, devaluation, meant that Italy has been forced to do it all by engaging in internal devaluation, i.e., lower wages, higher unemployment and boosting its current account deficit, which however is made virtually impossible given Italy’s deteriorating demographics. This is what DB’s Jim Reid said of Italy’s potential future: Looking forward, Italy will not find it easy to grow out of its problems as its facing one of the worst set of demographics of the G20 countries. Its population size has peaked (according to the UN) and is expected to decline out to 2050. Its working age population (15-64 year olds as a proxy) is set to fall -24% over the same period and is again one of the worst placed in the G20.

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“Home sales plunged 22% in May compared to a year ago..”

Toronto’s House Price Bubble Not Fun Anymore (WS)

Housing in the Greater Toronto Area is, let’s say, retrenching. Canada’s largest housing market has seen an enormous two-decade surge in prices that culminated in utter craziness in April 2017, when the Home Price Index had skyrocketed 32% from a year earlier. But now the hangover has set in and the bubble isn’t fun anymore. Home sales plunged 22% in May compared to a year ago, to 7,834 homes, according to the Toronto Real Estate Board (TREB). It affected all types of homes, even the once red-hot condos: • Detached houses -28.5% • Semi-detached houses -29.4% • Townhouses -13.4% • Condos -15.5%.

It was particularly unpleasant at the higher end: Sales of homes costing C$1.5 million or more plummeted by 46% year-over-year to 508 homes in May 2018, according to TREB data. Compared to the April 2017 peak of 1,362 sales in that price range, sales in May collapsed by 63%. But it’s not just at the high end. At the low end too. In May, sales of homes below C$500,000 – about 68% of them were condos – fell by 36% year-over-year to 5,253 homes. The TREB publishes two types of prices – the average price and its proprietary MLS Home Price Index based on a “composite benchmark home.” Both fell in May compared to a year ago.

The average price in May for the Greater Toronto Area (GTA) fell 6.6% year-over-year to C$805,320, and is now down 12.3%, or an ear-ringing C$113,000, from the crazy peak in April 2017. There are no perfect measures of home prices in a market. Each has its own drawbacks. Average home prices can be impacted by the mix and by a few large outliers – but over the longer term, it gives a good impression of the direction. The chart below shows thepercentage change in average home prices in the GTA compared to a year earlier:

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Because the boom was a bubble.

Why Australia’s Great Banking Boom Has Ended (SMH)

It doesn’t feel all that long ago that Australian banks were the envy of the world. In March 2009, when stress-testing of US financial institutions drove the final spasm of the previous year’s credit crisis, you could have bought all the shares in Citigroup, Royal Bank of Scotland Group and Barclays with their $US8.4 trillion ($11 trillion) of gross assets for less than you’d pay for the equity of Westpac, with $US347 billion of assets. Commonwealth Bank of Australia’s share price peaked six years later just a sliver south of three times the value of its net assets, an extraordinary level in a business where price-book ratios have struggled to break above one times over the past decade.

With the current Royal Commission inquiring into practices in the country’s financial services industry and a slew of court cases, those high-flyers have come to earth with a bump. CBA on Monday agreed to pay $700 million to settle a money laundering case in which it admitted that a software update allowed about 54,000 reportable transactions to go unreported over a period of almost three years. On Friday, ANZ and local units of Deutsche Bank and Citigroup announced they were facing possible criminal cartel charges over their handling of a $2.5 billion placement of ANZ shares in 2015. Having executives hauled up before government inquiries and paying out hundreds of millions in court settlements isn’t great for headlines, but it would be a mistake to see the declines in Australia’s banking sector as purely a result of this.

When your annual net income is in the region of $10 billion, as CBA’s is, a $700 million charge is more than just a rounding error. But the 1.2 per cent jump in the company’s stock after the settlement was announced Monday is an indication that the cost is worth less to shareholders than the benefit of putting the issue firmly in the past. The greater risk to Australia’s banks lurks not in the papers of regulators and inquisitors, but on the streets of the country’s sprawling suburbs. As we’ve argued before, the most ominous indicator to watch is also a favourite one of the Reserve Bank of Australia. Rents, as measured by the Australian Bureau of Statistics, have been increasing at less than 1 per cent for nine consecutive quarters , the worst performance for the measure since the housing crash of the early 1990s.

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The spirit of Steve Jobs?!

Apple Jams Facebook’s Web-Tracking Tools (BBC)

Apple will attempt to frustrate tools used by Facebook to automatically track web users, within the next version of its iOS and Mac operating systems. “We’re shutting that down,” declared Apple’s software chief Craig Federighi, at the firm’s developers conference. He added that the web browser Safari would ask owners’ permission before allowing the social network to monitor their activity. The move is likely to add to tensions between the two companies. Apple’s chief executive Tim Cook had previously described Facebook’s practices as being an “invasion of privacy” – an opinion Facebook’s founder Mark Zuckerberg subsequently denounced as being “glib”.

At the WWDC conference – held in San Jose, California – Mr Federighi said that Facebook keeps watch over people in ways they might not be aware of. “We’ve all seen these – these like buttons, and share buttons and these comment fields. “Well it turns out these can be used to track you, whether you click on them or not.” He then pointed to an onscreen alert that asked: “Do you want to allow Facebook.com to use cookies and available data while browsing?” “You can decide to keep your information private.”

One cyber-security expert applauded the move. “Apple is making changes to the core of how the browser works – surprisingly strong changes that should enable greater privacy,” said Kevin Beaumont. “Quite often the changes companies make around privacy are small, incremental, they don’t shake the market up much. “Here Apple is allowing users to see when tracking is enabled on a website – actually being able to visually see that with a prompt is breaking new ground.”

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Building on the Ring of Fire.

A West Coast State of Mind (Jim Kunstler)

It’s only been in the last thirty years that Seattle hoisted up its tombstone cluster of several dozen office and condo towers. That’s what cities do these days to demonstrate their self-regard, and Seattle is perhaps America’s boomingest city, what with Microsoft’s and Amazon’s headquarters there — avatars of the digital economy. A megathrust earthquake there today would produce a scene that even the computer graphics artistes of Hollywood could not match for picturesque chaos. What were the city planners thinking when they signed off on those building plans?

I survived the journey through the Seattle tunnel, dogged by neurotic fantasies, and headed south to California’s Bay Area, another seismic doomer zone. For sure I am not the only casual observer who gets the doomish vibe out there on the Left Coast. Even if you are oblivious to the geology of the place, there’s plenty to suggest a sense of impossibility for business-as-usual continuing much longer. I got that end-of-an-era feeling in California traffic, specifically driving toward San Francisco on the I-80 freeway out in the suburban asteroid belt of Contra Costa County, past the sinister oil refineries of Mococo and the dormitory sprawl of Walnut Creek, Orinda, and Lafayette.

Things go on until they can’t, economist Herb Stein observed, back in the quaint old 20th century, as the USA revved up toward the final blowoff we’ve now entered. The shale oil “miracle” (so-called) has given even thoughtful adults the false impression that the California template for modern living will continue indefinitely. I’d give it less than five years now.

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Snowden deserves as much support as Assange does.

Edward Snowden: ‘The People Are Still Powerless, But Now They’re Aware’ (G.)

Edward Snowden has no regrets five years on from leaking the biggest cache of top-secret documents in history. He is wanted by the US. He is in exile in Russia. But he is satisfied with the way his revelations of mass surveillance have rocked governments, intelligence agencies and major internet companies. In a phone interview to mark the anniversary of the day the Guardian broke the story, he recalled the day his world – and that of many others around the globe – changed for good. He went to sleep in his Hong Kong hotel room and when he woke, the news that the National Security Agency had been vacuuming up the phone data of millions of Americans had been live for several hours.

Snowden knew at that moment his old life was over. “It was scary but it was liberating,” he said. “There was a sense of finality. There was no going back.” What has happened in the five years since? He is one of the most famous fugitives in the world, the subject of an Oscar-winning documentary, a Hollywood movie, and at least a dozen books. The US and UK governments, on the basis of his revelations, have faced court challenges to surveillance laws. New legislation has been passed in both countries. The internet companies, responding to a public backlash over privacy, have made encryption commonplace.

Snowden, weighing up the changes, said some privacy campaigners had expressed disappointment with how things have developed, but he did not share it. “People say nothing has changed: that there is still mass surveillance. That is not how you measure change. Look back before 2013 and look at what has happened since. Everything changed.” The most important change, he said, was public awareness. “The government and corporate sector preyed on our ignorance. But now we know. People are aware now. People are still powerless to stop it but we are trying. The revelations made the fight more even.”

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Bayer-Monsanto: “It will effectively control nearly 60% of the world’s supply of proprietary seeds, 70% of the chemicals and pesticides used to grow food, and most of the world’s GM crop genetic traits..”

Who Should Feed The World: Real People Or Faceless Multinationals? (Vidal)

Unless there is a major hiccup in the next few days, an incredibly powerful company will shortly be given a licence to dominate world farming. Following a nod from Donald Trump, powerful lobbying in Europe and a lot of political arm-twisting on several continents, the path has been cleared for Monsanto, the world’s largest seed company, to be taken over by Bayer, the second-largest pesticide group, for an estimated $66bn (£50bn). The merger has been called both a “marriage made in hell” and “an important development for food security”.

Through its many subsidiary companies and research arms, Bayer-Monsanto will have an indirect impact on every consumer and a direct one on most farmers in Britain, the EU and the US. It will effectively control nearly 60% of the world’s supply of proprietary seeds, 70% of the chemicals and pesticides used to grow food, and most of the world’s GM crop genetic traits, as well as much of the data about what farmers grow where, and the yields they get. It will be able to influence what and how most of the world’s food is grown, affecting the price and the method it is grown by. But the takeover is just the last of a trio of huge seed and pesticide company mergers.

Backed by governments, and enabled by world trade rules and intellectual property laws, Bayer-Monsanto, Dow-DuPont and ChemChina-Syngenta have been allowed to control much of the world’s supply of seeds. You might think that these mergers would alert the government, but because political parties in Britain are so inward-looking, and because most farmers in rich countries already buy their seeds from the multinationals, opposition has barely been heard.

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Apr 202018
 
 April 20, 2018  Posted by at 8:32 am Finance Tagged with: , , , , , , , , , , , ,  12 Responses »


Daniel Garber The quarry 1917

 

The World’s First Total Bubble (MB)
Now Even a Fed Dove Homes in on the “Everything Bubble” (WS)
Recession Risks Are Increasing – Axel Weber (CNBC)
The Faster Tesla Makes Model 3’s, The More Money They Will Lose (SM)
Marx Predicted Our Present Crisis – And Points The Way Out (Varoufakis)
Market Power Wielded By US Tech Giants Concerns IMF Chief (G.)
Bill Gates Backs Plan to Surveil the Entire Planet From Space (Gizmodo)
Palantir Knows Everything About You (BW)
Comey Memos Already Leaked To AP (ZH)
US Sorghum Armada U-Turns At Sea After China Tariffs (R.)
EU to Reject UK Brexit Plan for the Irish Border (BBG)
Turkey Snap Election All About Power And A ‘Deteriorating’ Economy (CNBC)
Brazil Prosecutor Recommends Denying Total Oil License Near Amazon (AFP)
Cow Could Soon Be Largest Land Mammal Left Due To Human Activity (R.)

 

 

Australians think they won.

The World’s First Total Bubble (MB)

The regulators, yes, they’ll have to be reformed. But it doesn’t stop there. They were just the elite enablers. The corruption at the heart of the great Australian property bubble seeped into our entire economy and culture. It oozed under every door, entered every home and visited every BBQ. It bent every business. It ruined our media and distorted our politics. It infected our entire place in the world, disenfranchised from the Australian dream entire generations. It has choked our cities. And sold out the national interest to Chinese speculators, threatening our very freedom. There has never been a more comprehensive bubble in any nation. We have been engulfed by it. The world’s first total bubble.

Yet at its heart was not a miracle but prosaic bank corruption. Only the failure to assess expenditures and incomes, the failure to report accurately and honestly, the failure to advise with integrity and responsbility made any of it possible. Everything else flows outward from this black singularity. Your wealth. Your lifestyle. Your retirement plan. The roof over your head not being over someone else’s. All of it stems from the core corruption of a banking system that disgorged massive sub-prime mortgages across our firmament. I really have no idea what attempted snow job we will see next. But it is over. It is now only a matter of time before the Australian housing supernova collapses towards the banking black hole at its centre, sucked back into the void from whence it came. We’re all the royal commission now.

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Brainard. Warning about what the Fed itself has built.

Now Even a Fed Dove Homes in on the “Everything Bubble” (WS)

“If we have learned anything from the past, it is that we must be especially vigilant about the health of our financial system in good times, when potential vulnerabilities may be building,” explained Federal Reserve Board Governor Lael Brainard in a speech in Washington, D.C., this morning. This was a reference to a time-honored banker adage, now mostly forgotten after nearly nine years of easy money: Bad deals are made in good times. Brainard fills one of the seven slots on the Board of Governors. Two slots are filled by Chairman Jerome Powell and by Randal Quarles. Four slots remain vacant, waiting for Trump appointees to wend their way. She is a strong “dove” in the world of central banks, and she just pointed at why the Fed is tightening – and will continue to tighten: the Everything Bubble.

After rattling off a litany of indicators showing why and how the economy’s “cyclical conditions have been strengthening,” she added this gem, there being nothing like Fed-speak to make your day: “Currently, inflation appears to be well-anchored to the upside around our 2 percent target.” “Well-anchored to the upside” of the Fed’s target – and then she moved on to the “signs of financial imbalances.” “Financial imbalances,” in Fed speak, are asset bubbles, a phenomenon when prices are out of whack with economic reality. In a credit-based economy, assets are collateral for debt. And inflated asset prices put the financial system, meaning the lenders, at risk when those asset prices deflate. Since the Fed has to take care of the financial system, and since it blew up so wonderfully last time due to asset bubbles deflating, the Fed is right to be worried about it. At first the hawks, the rare ones; and now even the doves

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“Risks will begin materializing in 3 years ‘at the latest..'”

Recession Risks Are Increasing – Axel Weber (CNBC)

The world economy is set for one of its best years since the global financial crisis, with both developed and emerging countries growing while inflation is still subdued and monetary conditions remain largely accommodative. But such a good run could end in the next two to three years, according to UBS Chairman Axel Weber. “We’re at the end of a long recovery and, two to three years from now, at the latest, some of the risks could materialize. The recession risks are increasing,” Weber told CNBC’s Joumanna Bercetche this week at the Spring Meetings of the IMF and the World Bank. The IMF this week kept its forecast for 2018’s global growth at 3.9 percent which, if it materializes, would be the fastest expansion since 2011.

But the agency warned that global debt levels have hit a record, and governments should start reducing their indebtedness and build buffers for “challenges that will unavoidably come in the future.” Financial institutions should also brace for such risks, said Weber, adding that he thinks banks have become better prepared compared to before the last crisis. Like many in the industry, Weber said he doesn’t think a full-fledged trade war will happen as a result of the ongoing dispute between the U.S. and China. But, he added that it’s time to reassess Beijing’s role in the World Trade Organization, especially given projections that China will one day become the world’s largest economy. Weber added that companies from around the world should be allowed to do business in China more freely.

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“..a “they will take over the world” and a “they will save the world” combination of hopes..”

The Faster Tesla Makes Model 3’s, The More Money They Will Lose (SM)

A few weeks ago, we shared a note about Tesla from the hedge fund Vilas Capital Management. The firm, which is short the shares, said “Tesla is going to crash in the next 3-6 months.” I received an update from Vilas this morning explaining why they’re even more bearish on Tesla today. The firm pared its short positions after the recent selloff. And Telsa now comprises about 98% of their short book. Clearly Vilas thinks Tesla’s reckoning is imminent. You can read the rest of Vilas’ thoughts on Tesla below:

We added meaningfully to our Tesla position in the first quarter at prices in the $340 range. We continue to believe that Tesla is extremely overvalued and that it will experience significant financial difficulties over time. All companies in a capitalistic system need to earn profits and those profits need to be attractive relative to the amount of shareholder capital employed. Tesla has never earned an annual profit. Along with digital currencies and Unicorns, Tesla appears to be caught up in a gold-rush-fever type of emotional response, both from a “they will take over the world” and a “they will save the world” combination of hopes, instead of their owners looking at the numbers.

Tesla bulls will argue that their production will rise to 5000 Model 3’s per week soon and, therefore, the stock will trade meaningfully higher. Given that the company lost $20,000 per Model S and X sold for roughly $100,000 each last year, due to the fact that it cost more to build, sell, service, charge and maintain these cars than they collected in revenue, as it is important to include all costs when evaluating a business, we predict it will impossible for Tesla to make a profit on a $35,000 to $50,000 car. As anyone with automotive experience knows, profit margins are far higher on bigger, more expensive cars. Therefore, the faster Tesla makes Model 3’s, the more money they will lose.

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Das Kapital.

Marx Predicted Our Present Crisis – And Points The Way Out (Varoufakis)

To see beyond the horizon is any manifesto’s ambition. But to succeed as Marx and Engels did in accurately describing an era that would arrive a century-and-a-half in the future, as well as to analyse the contradictions and choices we face today, is truly astounding. In the late 1840s, capitalism was foundering, local, fragmented and timid. And yet Marx and Engels took one long look at it and foresaw our globalised, financialised, iron-clad, all-singing-all-dancing capitalism. This was the creature that came into being after 1991, at the very same moment the establishment was proclaiming the death of Marxism and the end of history.

Of course, the predictive failure of The Communist Manifesto has long been exaggerated. I remember how even leftwing economists in the early 1970s challenged the pivotal manifesto prediction that capital would “nestle everywhere, settle everywhere, establish connexions everywhere”. Drawing upon the sad reality of what were then called third world countries, they argued that capital had lost its fizz well before expanding beyond its “metropolis” in Europe, America and Japan.

Empirically they were correct: European, US and Japanese multinational corporations operating in the “peripheries” of Africa, Asia and Latin America were confining themselves to the role of colonial resource extractors and failing to spread capitalism there. Instead of imbuing these countries with capitalist development (drawing “all, even the most barbarian, nations into civilisation”), they argued that foreign capital was reproducing the development of underdevelopment in the third world. It was as if the manifesto had placed too much faith in capital’s ability to spread into every nook and cranny. Most economists, including those sympathetic to Marx, doubted the manifesto’s prediction that “exploitation of the world-market” would give “a cosmopolitan character to production and consumption in every country”.

As it turned out, the manifesto was right, albeit belatedly. It would take the collapse of the Soviet Union and the insertion of two billion Chinese and Indian workers into the capitalist labour market for its prediction to be vindicated. Indeed, for capital to globalise fully, the regimes that pledged allegiance to the manifesto had first to be torn asunder. Has history ever procured a more delicious irony?

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Yeah, sure.

Market Power Wielded By US Tech Giants Concerns IMF Chief (G.)

The head of the International Monetary Fund, Christine Lagarde, has expressed concern about the market power wielded by the US technology giants and called for more competition to protect economies and individuals. Speaking at a press conference to mark the start of the IMF’s spring meeting in Washington, Lagarde said breaking up companies was not the solution, but added that her organisation was monitoring their impact on prosperity, financial stability and the workplace. “Competition is needed. From competition you get productivity growth and innovation. Too much concentration, too much market power in the hands of the few is not helpful to the economy or to the wellbeing of individuals.”

Pressure has been building in the US for antitrust laws to be used to break up some of the biggest companies, with Google, Facebook and Amazon all targeted by critics. Lagarde said: “I am not sure breaking up some of the tech titans in this country [the US] or in other countries will be the right answer. It used to be the right answer, but when most of the assets are intangible, how do you break them up? How do you facilitate access and allow market disruptors to operate? I think that is where a lot of new thinking has to be done.”

The IMF is carefully monitoring new digital currencies such as Bitcoin, which it says are prone to fraud and can be used for money laundering. “We have seen a flourishing of cryptocurrencies. There are now more than 100. That has stability implications eventually. We do not think it is systemic at this point in time but regulators and supervisors have to be watchful.” Lagarde expressed concern at the growing threat of a trade war between the US and China, saying that protectionism posed a threat to the upswing in the global economy and to an international system that had served countries well.

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Facebook is peanuts.

Bill Gates Backs Plan to Surveil the Entire Planet From Space (Gizmodo)

EarthNow is a new company looking to provide satellite imagery and live video in virtually real-time. Its unsettling pitch describes a network of satellites that can see any corner of the globe and provide live video with a latency of about a second. And a look at the startup’s top investors gives a lot of confidence that this thing is happening. On Wednesday, EarthNow announced that it will emerge from the Intellectual Ventures ISF Incubator to become a full-scale commercial business. Its first round of investors is comprised of a small group of complimentary powerhouses: AirBus, the SoftBank Group, Bill Gates, and satellite-industry vet Greg Wyler.

The amount of the initial investment hasn’t been disclosed, but the announcement says the funding “focuses primarily on maturing the overall system design to deliver innovative and unique real-time Earth observation services.” That makes it sound like the company is in its very early stages, but don’t be so sure. Wyler’s OneWeb has already deployed highly advanced satellites with a blazing fast 130ms latency and its goal is to have a constellation of hundreds of satellites beaming broadband around the globe by 2020.

EarthNow will use an upgraded version of OneWeb’s technology with a lot of hardware power packed into a 500-pound unit. “Each satellite is equipped with an unprecedented amount of onboard processing power, including more CPU cores than all other commercial satellites combined,” the announcement says. The satellites will also do an onboard analysis of the live imagery using machine learning, but the company doesn’t go into detail about what it will analyze or why it would be necessary to dedicate that processing onboard.

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“Wall Street meets Apocalypse Now,..”

Palantir Knows Everything About You (BW)

High above the Hudson River in downtown Jersey City, a former U.S. Secret Service agent named Peter Cavicchia III ran special ops for JPMorgan Chase & Co. His insider threat group—most large financial institutions have one—used computer algorithms to monitor the bank’s employees, ostensibly to protect against perfidious traders and other miscreants. Aided by as many as 120 “forward-deployed engineers” from the data mining company Palantir, which JPMorgan engaged in 2009, Cavicchia’s group vacuumed up emails and browser histories, GPS locations from company-issued smartphones, printer and download activity, and transcripts of digitally recorded phone conversations.

Palantir’s software aggregated, searched, sorted, and analyzed these records, surfacing keywords and patterns of behavior that Cavicchia’s team had flagged for potential abuse of corporate assets. Palantir’s algorithm, for example, alerted the insider threat team when an employee started badging into work later than usual, a sign of potential disgruntlement. That would trigger further scrutiny and possibly physical surveillance after hours by bank security personnel. Over time, however, Cavicchia himself went rogue. Former JPMorgan colleagues describe the environment as Wall Street meets Apocalypse Now, with Cavicchia as Colonel Kurtz, ensconced upriver in his office suite eight floors above the rest of the bank’s security team.

People in the department were shocked that no one from the bank or Palantir set any real limits. They darkly joked that Cavicchia was listening to their calls, reading their emails, watching them come and go. Some planted fake information in their communications to see if Cavicchia would mention it at meetings, which he did. It all ended when the bank’s senior executives learned that they, too, were being watched, and what began as a promising marriage of masters of big data and global finance descended into a spying scandal. The misadventure, which has never been reported, also marked an ominous turn for Palantir, one of the most richly valued startups in Silicon Valley. An intelligence platform designed for the global War on Terror was weaponized against ordinary Americans at home.

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It took less than an hour.

Comey Memos Already Leaked To AP (ZH)

Update 3: President Trump is up late tonight, we suspect reading through former FBI Director Comey’s leaked memos as he exclaims: “James Comey Memos just out and show clearly that there was NO COLLUSION and NO OBSTRUCTION.” Trump is also quick to remind Americans of one of the reasons he fired him: “Also, he leaked classified information,” and ended with a jab at the endless farce: “WOW! Will the Witch Hunt continue?”

Update 2: Less than an hour after Comey’s memos were released by DOJ to Congress, the 15 pages have miraculously “become available” to The Associated Press. Given that no source is provided, we assume they were leaked with the intent to embarrass President Trump. Comey’s memos detail private dinner conversations with the President in January 2017, during which Trump asked him to pledge his loyalty. Another conversation about former White House national security adviser Michael Flynn is also detailed in the memos. In a memo dated Jan. 28, 2017, Comey recounted a dinner he had with Trump at the White House shortly after the president’s inauguration.

Trump asked Comey who he thought he should be in contact with in the administration, and Comey mentioned the national security adviser. The president said Flynn had “serious judgment issues,” Comey wrote in his memo. Trump then explained to Comey that when the president had complimented British Prime Minister Theresa May on being the first to congratulate him on his election, Flynn interjected that another leader had called first. That was the first time Trump learned of the other leader’s call, Comey wrote.

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Why is US farmland used to provide Chinese animal feed? Isn’t that perhaps what’s wrong with global trade?

US Sorghum Armada U-Turns At Sea After China Tariffs (R.)

Several ships carrying cargoes of sorghum from the United States to China have changed course since Beijing slapped hefty anti-dumping deposits on U.S. imports of the grain, trade sources and a Reuters analysis of export and shipping data showed. Sorghum is a niche animal feed and a tiny slice of the billions of dollars in exports at stake in the trade dispute between the world’s two largest economies, which threatens to disrupt the flow of everything from steel to electronics. The supply-chain pain felt by sorghum suppliers on the Pacific, Atlantic and Indian oceans underscores how quickly the mounting trade tensions between the U.S. and China can impact the global agricultural sector, which has been reeling from low commodity prices amid a global grains glut.

Twenty ships carrying over 1.2 million tonnes of U.S. sorghum are on the water, according to export inspections data from the USDA’s Federal Grain Inspection Service. Of the armada, valued at more than $216 million, at least five changed course within hours of China’s announcing tariffs on U.S. sorghum imports on Tuesday, Reuters shipping data showed. The five shipments, all headed for China when they were loaded at Texas Gulf Coast export terminals owned by grain merchants Cargill or Archer Daniels Midland would be liable for a hefty deposit to be paid on their value, which could make the loads unprofitable to deliver. Beijing, which is probing U.S. imports for damage to its domestic industry, announced Tuesday that grains handlers would have to put up a deposit of 178.6% of the value of the shipments.

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Thie red lines are far apart. Hard to see how they will resolve this.

EU to Reject UK Brexit Plan for the Irish Border (BBG)

European Union officials are set to reject a potential U.K. solution to the crucial issue of what happens to the Irish border after Brexit, deepening the stalemate in negotiations. While the U.K. hasn’t made a formal proposal, it has indicated that the bloc’s “backstop” solution for maintaining an invisible border should apply to the whole of the U.K., according to three people familiar with the EU position. It would mean the whole U.K. stays in parts of the single market and customs union as a last resort to avoid a border on the island of Ireland. But the European Commission opposes it and only wants to offer that special status to Northern Ireland, according to the people, who declined to be named.

Finding a way to avoid customs checks on the border between Northern Ireland and Ireland after Brexit is proving the biggest obstacle for U.K. and EU negotiators trying to get a deal on Britain’s divorce from the bloc. While both sides agree that withdrawal treaty must include a “backstop” on Ireland in case a better option doesn’t emerge from the final trade deal, they can’t agree on what it should look like. As talks fail to yield solutions, pressure is mounting on Prime Minister Theresa May at home to backtrack on one her main Brexit pledges and keep the U.K. in the EU’s customs union after Brexit.

That would go a long way to solve the Irish border issue and would also please businesses that are keen on keeping cross-border trade easy. The Commission’s proposal would effectively cut Northern Ireland off from mainland Britain and May has said no British prime minister could accept that. In December, the two sides agreed on a backstop that would have applied to the whole of the U.K., rather than just Northern Ireland. The U.K. stands by that agreement, which also pledged that “no regulatory barriers develop between Northern Ireland and the rest of the United Kingdom.”

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Remember: Jim Rickards predicted Turkish default recently. Erdogan may see it too.

Turkey Snap Election All About Power And A ‘Deteriorating’ Economy (CNBC)

Turkey’s president surprised markets Wednesday by announcing that he would hold snap presidential and parliamentary elections in June with experts saying the move is a sign of both panic and genius. Recep Tayyip Erdogan said elections will be held on June 24, far earlier than previously expected, saying uncertainty over Turkey’s neighbor Syria, and macroeconomic imbalances, were a reason not to delay the vote originally scheduled for November 2019. He also said the country urgently needed to make the switch to an executive presidency, implementing changes to the Turkish constitution which give the president more power.

Fadi Hakura, Turkey analyst at Chatham House, told CNBC Thursday that the move was a sign of panic amid a deteriorating economy. “Erdogan’s calling of the election is a sign of panic and despair. Erdogan has previously viewed early elections as weakness and dishonorable to democracy, but now he’s panicking over the state of the Turkish economy,” Hakura said. “The very fact he’s called brought them forward by almost a year and a half should mitigate the fallout of a worsening economy on his popularity,” he said. [..] If Erdogan wins the election, as widely expected, he will be able to consolidate power following changes to the constitution which have changed Turkey from a parliamentary to a presidential republic, concentrating power in the hands of the president.

It will not be plain sailing for the president, however, with Turkey’s economy dealing with high inflation (at 10.2 percent) fueled by fiscal and monetary policies that have promoted rampant growth — the economy expanding 7.3 percent in the fourth quarter of 2017, according to the last reading available. The Turkish lira has been on a rollercoaster ride in recent months, reflecting wider fears on the prioritization of growth over inflation control, but the announcement of a snap election — and the likelihood that Erdogan will win – has calmed the currency somewhat.

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WIth Brazil as corrupt as it is, how long will this hold?

Brazil Prosecutor Recommends Denying Total Oil License Near Amazon (AFP)

A Brazilian prosecutor warned of “ecocide” in recommending against a drilling license for French oil major Total close to a huge coral reef near the mouth of the Amazon River. The prosecutor’s office for Amapa state said “the only way to guarantee avoiding environmental damage to the area is to deny the license.” “Authorizing oil drilling activity without adequate studies violates the international obligations that Brazil has signed,” the prosecutor’s office said late Wednesday, warning of “large-scale environmental destruction that would amount to ecocide and a crime against humanity.”

The recommendation was sent to the government environmental agency Ibama, which has 10 days to respond. On Tuesday, environmental campaigners Greenpeace said that a previously discovered coral reef had been found to extend right into where Total plans to drill. The enormous reef was found in 2016, but is only now said to overlap directly with Total’s blocks, 75 miles (120 km) off the Brazilian coast, the group said. The finding, made during a research expedition, invalidates Total’s environmental impact assessment, which is based on the reefs being located at least five miles (eight kilometers) from drilling, Greenpeace said.

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People say it won’t be that bad, because elephants do well in protected parks. But isn’t that the problem? That the best we can do is build big zoos?

Cow Could Soon Be Largest Land Mammal Left Due To Human Activity (R.)

The cow could be left as the biggest land mammal on Earth in a few centuries, according to a new study that examines the extinction of large mammals as humans spread around the world. The spread of hominims – early humans and related species such as Neanderthals – from Africa thousands of years ago coincided with the extinction of megafauna such as the mammoth, the sabre-toothed tiger and the glyptodon, an armadillo-like creature the size of a car. “There is a very clear pattern of size-biased extinction that follows the migration of hominims out of Africa,” the study’s lead author, Felisa Smith, of the University of New Mexico, said of the study published in the journal Science on Thursday..

Humans apparently targeted big species for meat, while smaller creatures such as rodents escaped, according the report, which examined trends over 125,000 years. In North America, for instance, the mean body mass of land-based mammals has shrunk to 7.6kg (17lb) from 98kg after humans arrived. If the trend continues “the largest mammal on Earth in a few hundred years may well be a domestic cow at about 900kg”, the researchers wrote. That would mean the loss of elephants, giraffes and hippos. In March, the world’s last male northern white rhino died in Kenya. [..] Smith said “my optimist hat would like to say that it’s not going to happen because we love elephants”. But she said populations of large land mammals were falling and “declining population is the trajectory to extinction”.

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